How Will New Tariffs Impact iPhone Prices?

President Donald Trump has made headlines with a recent announcement regarding a deal with China that could influence the price of a new iPhone. This development may not have the drastic financial shift many might expect, but it’s significant nonetheless.

“WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%,” Trump stated on Truth Social, indicating that both he and China’s President Xi Jinping still need to finalize the deal. The 55% tariff includes a mix of previously agreed tariffs, and significantly, a 25% smartphone tariff hinted to impact iPhones produced in China.

While Apple didn’t comment on tariffs during the recent Worldwide Developers Conference, the buzz around the suspected price hike for the upcoming iPhone 17 has tech enthusiasts rightfully asking: is now the best time to purchase a new iPhone?

How much could tariffs raise iPhone prices?

Though companies usually absorb a portion of tariff costs, significant price hikes are still likely. Michael Coon, an associate professor of economics at the University of Tampa, predicts that Apple could pass on 80% to 90% of the tariff costs to consumers. With existing and new tariffs looming, understanding the potential financial impact is crucial.

iPhones manufactured in China already incur a hefty 25% tariff from previous policies, and the new agreement could impose an additional 30% tariff. Comparatively, devices manufactured in India benefit from a baseline 10% tariff, which could rise to 26% shortly. Here’s a look at how these tariffs could alter the cost of various iPhone models:

If we consider the estimated 90% pass-through of tariff costs, the price of an iPhone 16 Pro Max (1 TB) produced in China could skyrocket to $2,230. Comparatively, producing an iPhone in the U.S. would exceed $3,500, making overseas manufacturing still favorable.

When could we see iPhone prices increase?

The timeline for price hikes remains uncertain. As the market sells out of older stock free from tariffs, new shipments may necessitate increased prices. Even if tariffs are unavoidable, Apple has strategies to mitigate impacts through its services like Apple Music and iCloud. These options could subtly adjust costs while maintaining competitive prices.

As noted by supply chain expert Joe Hudicka, Apple might absorb initial tariff costs to stabilize retail prices before gradually passing them on through service bundling and device longevity. Meanwhile, the Wall Street Journal reported that Apple plans an overall price increase for iPhone models later this year.

Is it better to buy an iPhone and other tech now or wait?

If prices rise, the resale value of existing iPhones will likely increase too. When trading in, you could potentially offset the cost of a new purchase if Apple raises prices. If you’re considering financial options such as credit cards or installment plans, ensure you can cover these costs without accruing significant interest. With current average interest rates climbing above 20%, financing your purchase could diminish any savings.

Buying last year’s model or a certified refurbished phone could be a savvy strategy to save money. Apple’s Certified Refurbished program mirrors the automotive used car approach, helping you stay within the ecosystem while managing costs over time.