6 days Ago By [email protected] (Tom Pritchard)
The whole situation around tariffs is confusing, especially if you’re eagerly anticipating the iPhone 17 and want to know if the price is going to change. Well, following some changes over the weekend, it seems the whole mess is getting even more confusing.Despite an announcement that various electronics, including smartphones, would be exempt from the 125% reciprocal tariff imposed against Chinese goods last week, the White House has confirmed this is only temporary.
So rather than saving the iPhone 17 (and us) from price hikes, it seems like this change will only be valid “for a month or two”.Commerce Secretary Howard Lutnick, the same man that defended tariffing an island inhabited solely by penguins, confirmed this in an interview with ABC News.Lutnick emphasized the need to reshore semiconductor production in the U.
S. rather than in Taiwan and China. This is not a new or controversial topic, and work towards doing so was spearheaded by the Biden administration in the wake of COVID-19 and the global chip shortage.
But in this instance it means that semiconductors will be hit by a brand new kind of tariff, designed to encourage companies to bring that manufacturing to the U.S. That means semiconductors are being hit with a brand new tariff, and device like phones are apparently being grouped in as part of that.
Pharmaceutical products will also be hit by a new, similar tariff.All these new tariffs will be coming in the next couple of months and “are not available to be negotiated away by countries”. Which is just fan-flipping-tastic.
What does this mean for iPhone prices? (Image credit: Shutterstock)Having spoken to analysts about this exact topic, the idea of bringing manufacturing jobs back to the U.S. sounds good on paper.
But the problem is you can’t just pick up your manufacturing and drop it into a brand new country overnight.It’s a process that takes years, and even a small scale shift will cost billions of dollars.When pressed about this.
Lutnick dodged the question and simply talked about bringing jobs back to America — citing Panasonic’s new battery plant in Kansas. It’s worth pointing out that Panasonic broke ground on this site back in late 2022, with the aim of producing the first batteries in Spring 2025.Lutnick also brought up the topic of American farmers selling on the global market for some reason.
As if that has anything to do with semiconductor manufacturing.According to Ryan Reith, IDC's Group Vice President of WW Device Trackers, bringing something like iPhone manufacturing to the U.S.
would likely just mean final assembly. Components and materials would still be coming from Asia, and even in the best case scenario you’re looking at small scale production starting in three years' time.Avi Greengart, consumer technology analyst and founder of Techsponential, also confirmed that reshoring electronics manufacturing in the U.
S. would be impossible in the short term. In the long term a shift back to North America and the U.
S. could happen, but “would be enormously expensive to build from scratch.”Greengart also agrees that the majority of components would still need to come from Asia.
The price is likely to go up too, with one analyst predicting the cost of an iPhone could triple if it was made in the U.S.In other words, if what Lutnick says is true, and these new semiconductor tariffs do come into force later this year, the price of your electronics is going to go up.
Because right now, and in the immediate future, there’s no way to manufacture those devices outside of Asia.Be sure to read our explainer on how tariffs could affect the iPhone 17 price to find out more.More from Tom's GuideApple just tipped to launch two foldable devices next year — iPhone Fold and iPad FoldGoogle Pixel 9a display tested — this blows away the iPhone 16eiOS 19’s massive redesign just teased in new video — but some doubt its accuracy.
