Will the Trump tariffs cause gadget prices to rise?

Apple is “perhaps one of the most tariff-exposed companies” in the world and US President Donald Trump’s tariffs are “bad news” for tech firms that will inevitably cause prices on gadgets to rise, experts have warned.

The iPhone maker and other firms are facing a substantial impact on their supply chain because of Mr Trump’s import taxes on China and other Asian nations where many tech giants do nearly all their manufacturing.

There have already been reports in the US of panic buying of Apple products as consumers fear prices will spike in the months to come as the tariffs take effect, and it has been reported that Apple flew several plane-loads of products out of Asia in recent weeks in an attempt to stockpile devices and get ahead of the impending import tax rises.

It has been reported that research from one US investment bank has projected that iPhone prices could rise in the United States by as much as 43%, should Apple pass on the entire cost of the new tariffs to consumers.

Ben Barringer, global technology analyst at Quilter Cheviot, told the PA news agency that the cycle of US tariffs and reciprocal tariffs from other nations on US goods in response would have a “profound impact” on global supply chains, and that would inevitably mean prices going up, and not just in the US.

“Donald Trump’s tariffs are ultimately bad news for consumer electronics,” he said.

“No-one knows how much iPhones or other devices will now cost – there is still a lot to work out.

“However, it is fair to say that Apple is perhaps one of the most tariff-exposed companies out there.

“It has spoken previously about gaining an exemption, but whether or not this comes to fruition remains to be seen.

“We are not seeing any forecasts of extreme price rises for Apple’s products, but it is fair to say price increases are likely.

“Apple has the pricing power to do this, but we will soon find out how far it can go.

“Moving production to the US is also likely not an option given the time and cost this would take, and would probably do very little to the pricing.

“The tariffs announced are going to have a profound impact on supply chains globally, and not just on US consumers.

“We are likely to see retaliatory measures introduced by other countries, which will just escalate the cost of goods – including for those consumers buying in the UK.

“We may also see companies raise prices in other markets to help subsidise the new cost of sale in the US, but much of that sort of strategy will take a while to be implemented.

“While the tariffs have now come into effect, their impact is still the great unknown.”

The impact has already been felt by other tech firms too.

Nintendo has delayed opening the pre-orders for its much anticipated Switch 2 console in the US – which was due to begin on Wednesday – in order to assess the “potential impact of tariffs and evolving market conditions”.

Geraint John, vice president of research at supply chain intelligence firm Zero100, said the tariffs being applied to the Asian countries where many tech firms had moved manufacturing to from China meant there was “no tariff-free option” for tech firms shipping products to the US.

“Consumer electronics such as the Apple iPhone, Samsung Galaxy series phones and Nintendo Switch used to be manufactured almost entirely in China,” he told PA.

“President Trump’s first wave of tariffs on Chinese goods in 2018 and 2019, along with China’s prolonged Covid-19 lockdowns from 2020 onwards, led these and other brand owners to shift some final product assembly out of China to other countries in South East Asia – a strategy known as ‘China+1’.

“Although Trump has continued to target Chinese imports to the US with additional tariffs of 54% – and potentially even more now – his liberation day announcement also singled out China+1 countries such as Vietnam – 46% tariff.

“Zero100 data analysis shows that electronics shipments from Vietnam to the US increased by 774% between 2019 and 2024.

“Samsung now makes all its smartphones in Vietnam and India – 26% tariff – and none in China; Apple uses these two countries for AirPods, iPads and some iPhones; and Nintendo makes the Switch in Vietnam.

“As things stand, there’s now no tariff-free option for these companies when shipping products to the US.

“It won’t be possible for them to offload cost increases of this magnitude entirely to their Asian suppliers, so they will have little choice but to raise prices for US consumers.”

Smartphone expert Ben Wood, chief analyst at CCS Insight, said it was “likely” that “retail prices will have to increase” for smartphones and other consumer electronic devices “if nothing changes quickly”.

But he added: “We believe there is space for individual companies to lobby for some relief.

“President Trump is a populist and a huge price increase in the cost of the iPhone would be highly unpopular with US consumers; this could lead Apple to seek an exemption, which it has secured in the past.

“Apple is likely to have some sway here as an American firm with strong domestic appeal.”

Mr John concurred that this could be an approach the iPhone maker attempts, but warned it was currently unclear if that would succeed.

“Apple CEO Tim Cook famously negotiated 10% tariff exemptions with Trump in 2019 to stop the price of iPhones increasing for US consumers. But this time around the president has indicated that such exemptions won’t be granted,” he said.

“Even if Apple were to start producing some iPhone models in the US – a transition that could take several years – it would remain dependent on Chinese and other suppliers in Asia for many of the main electronic components.

“These imported parts could still be subjected to high tariffs.”