President Donald Trump’s plan to relocate iPhone production to the US faces major legal and economic hurdles.

The proposal includes a possible 25% tariff on iPhones sold in the US that are not made domestically.

Commerce Secretary Howard Lutnick suggested automation could help create skilled jobs, but Apple CEO Tim Cook said the technology isn’t ready yet.

Legal experts say the administration might use the International Emergency Economic Powers Act (IEEPA) to justify tariffs, but using it for company-specific action is legally questionable and could face court challenges.

Tariffs aimed only at Apple might benefit rival smartphone makers, defeating the purpose of job creation.

Economically, experts warn of high costs and long timelines. Dan Ives from Wedbush said moving iPhone production could take up to 10 years and push prices up to US$3,500 per unit.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Tech tariffs have already proven costly for the industry and consumers

Previous rounds of tech-focused tariffs imposed since 2018 have already cost electronics companies $10 billion, primarily affecting components and parts1.

These trade actions consistently lead to higher consumer prices, with the Consumer Technology Association warning about price increases during holiday shopping seasons following tariff implementations1.

Small tech companies, which typically operate on thinner profit margins than giants like Apple, have been particularly vulnerable to tariff-induced financial strain2.

Research estimates that a 10% tariff could slow U.S. growth by $163 billion over a decade, while a 25% tariff could result in a $334 billion loss2.

The historical pattern suggests that tariffs function primarily as taxes on domestic consumers rather than effective leverage for reshoring manufacturing.

2️⃣ Global smartphone makers have been diversifying manufacturing beyond China for years

Both Apple and Samsung have been strategically shifting their manufacturing footprints well before the current tariff threats, showing this is a long-term industry trend rather than a reaction to political pressure.