President Trump announced Wednesday he would raise import taxes on China to 125 percent, sending tech firms scrambling to offset the impact on their prices.
While some companies may try to shift production to the U.S., industry observers say consumers will feel price hikes as the extra costs get passed to some of their most-used products.
“China [is] the source for many of the electronics that are made. China has built up this massive supply chain and a manufacturing ecosystem that makes it efficient for them to produce electronics of all sorts,” Rick Kowalski, the senior director of business intelligence for the Consumer Technology Association (CTA), told The Hill.
Much of the attention is on Apple, which sits at the “eye of the tariff storm,” said Dan Ives, global head of technology research at Wedbush Securities.
“While Apple has diversified its supply chain to other parts of the world including Vietnam, India and the U.S. ... the hearts and lungs of the Apple supply chain are cemented in Asia,” Ives wrote in a recent investors note.
Apple outsources much of its production process to Foxconn, a Taiwanese electronics manufacturer, to build the company’s popular iPhones, iPads, Macs, AirPods and other hardware in China.
More than 50 percent of Mac products and 75 to 80 percent of iPads sold by Apple are assembled in China, according to estimates by Wedbush Securities.
Under the tariffs, the price of Apple’s newest iPhone 16 Pro Max 256 GB could increase by as much as 56 percent, driving the price tag from about $1,199 to $1,874, UBS analysts shared in a research note when the Chinese tariffs stood at 104 percent.
As Trump continues to boost tariffs on China, experts warn shortages of Apple products and similar goods are becoming more likely.
Experts also cited Dell Technologies and HP as companies likely to be impacted due to their reliance on global manufacturing.
Read more in a full report Thursday morning at TheHill.com.
