Gold bars to be exempt from tariffs, White House clarifies
Investing.com --Apple (NASDAQ:AAPL) is contemplating increasing the prices of its upcoming fall iPhone lineup, according to the Wall Street Journal.
Apple shares added to earlier gains and are up 6.8% as of 10:15 GMT (06:15 EST).
The report also adds that Apple’s price increase strategy is being considered in a way that does not link it directly to U.S. tariffs on Chinese goods, where most Apple devices are assembled.
The potential price increase is expected to be paired with new features and design modifications, including an ultra-thin design.
The U.S. and China have agreed to suspend most of their mutual tariffs, but a 20% tariff set by President Trump on Chinese goods, due to Beijing’s alleged involvement in the fentanyl trade, remains in effect and applies to smartphones.
The President had previously exempted smartphones and some other electronic products from a separate reciprocal tariff on Chinese goods, which will temporarily be reduced to 10% from 125% under the new trade agreement.
Apple is finding it challenging to offset China tariff costs solely by seeking additional savings from its suppliers, which could potentially impact its profit margin unless it can increase prices.
Tariffs on Chinese goods, including smartphones, would likely be higher than those on goods from India and Vietnam, the other two main countries where Apple products are assembled. This is why Apple’s transition to Indian production for smartphones exported to the U.S. is expected to speed up.
Earlier this month, Cook stated that the majority of iPhones shipped to the U.S. in the April-to-June quarter would originate from India.
However, for Apple’s most profitable high-end phones, such as the Pro and Pro Max models, Chinese factories are expected to continue to handle most of the production, according to WSJ.
While Indian factories are capable of producing Pro models, India’s infrastructure and technical capabilities are not yet adequate to support mass production on the scale that China currently offers.