How Much Will a Made-in-the-USA iPhone Cost?

The White House said President Donald Trump believes the U.S. has the manpower and resources to make iPhones domestically. Analysts say that's impossible. How much would a made-in-the-U.S. iPhone cost, writes CNBC.

Photo: Business © Tanya Keisha | Dreamstime.com

When President Barack Obama asked the late Apple CEO Steve Jobs about producing the iPhone in the U.S., he didn't beat around the bush.

"Those jobs are not coming back," Jobs said at a dinner with Obama in 2011. The US president and Apple chief had changed, but the ambition to create an iPhone labeled "Made in the USA" remained.

In defending its “reciprocal trade tariffs,” the White House said last week that President Donald Trump believes the U.S. has the labor force and resources to make iPhones domestically. Neither Apple CEO Tim Cook nor anyone else at the company has backed that claim. Analysts who follow Apple say the idea of ​​a U.S. iPhone is impossible at worst and prohibitively expensive at best.

On the subject: Trump Pauses Tariffs for All Countries Except China: China Will Pay 125%

Bank of America Securities analyst Vamsi Mohan noted on April 10 that the iPhone 16 Pro, which currently costs $1199, could increase in price by 25% due to labor costs alone, making it a roughly $1500 device.

Wedbush's Dan Ives put the price of a US iPhone at $3500, estimating that Apple would have to spend $30 billion over three years to move 10% of its supply chain to the US.

Apple currently manufactures more than 80% of its products in China. Those products are now subject to a 145% tax when imported into the U.S. after Trump's trade tariffs went into effect.
Experts say a "Made in the USA" iPhone would face significant challenges, from finding and paying American labor to the cost of trade tariffs Apple would incur when importing components to the U.S. for final assembly.

The consensus among analysts is that it's unlikely to happen. Wall Street has doubted for years that Apple would make an American iPhone.

"It's not realistic that manufacturing will move here in the timeframe of the tariffs. That's a pipe dream," said Jeff Fieldhack, research director at Counterpoint Research.

Apple designs its products in California, but they are manufactured by contract manufacturers such as Foxconn, the company's main supplier.

Even if Apple were to spend huge amounts of money to convince Foxconn or another partner to assemble some iPhones in the US, building factories and installing equipment would take years, and there is no guarantee that US trade policy will not change again.

"An army of millionsov people tightening small screws"

The biggest problem with the American iPhone is that the US does not have the same labor force as China, although the huge number of workers needed to produce the iPhone is what attracts the Trump administration.

"An army of millions of people turning little screws to make iPhones is what's coming to America," Commerce Secretary Howard Lutnick said on April 13.

Foxconn assembles iPhones and other Apple products in massive factories that include dormitories and company vehicles. Workers often travel from nearby regions for short periods, and employment spikes in the summer before new iPhones are released in the fall. This streamlined system helps Apple produce more than 200 million iPhones a year.

Foxconn has also faced criticism for its working conditions. In 2011, the company installed nets around some buildings after a spate of worker suicides. Watchdog groups have noted that Foxconn's work environment is grueling, with workers forced to work long hours.

Despite harsh working conditions, Foxconn hired 50 extra workers at its largest plant in Henan to produce enough iPhones ahead of the September launch of the latest models, Chinese media reported last fall.

But Chinese workers are paid far less than American workers. The hourly wage during the iPhone 16’s production was 26 yuan, or $3,63, with a signing bonus of 7500 yuan, or about $1000, according to the South China Morning Post. By comparison, the minimum wage in California is $16,50 an hour.
Bank of America Securities' Mohan estimated Thursday, April 10, that labor costs to assemble and test iPhones in the U.S. will be $200 per unit — compared with $40 in China.

Apple CEO Cook has noted that the second problem is the lack of skills among American workers. In a 2017 interview, he said that the U.S. lacks tooling engineers. These engineers operate the machines that turn Apple’s complex digital designs into physical objects.
"It's about the quantity and type of skills in one place," Cook explained at the conference, when asked why Apple makes so much of its work in China.

A gathering of tooling engineers in China would fill "several football fields," he said, while in the U.S. it would barely fill just one.

"Big beautiful factories"

Trump announced Foxconn's $2017 billion investment in Wisconsin factories in 10. Apple has not been formally linked to Foxconn's Wisconsin plant, but that hasn't stopped Trump from saying Apple would build three "big, beautiful factories" in the U.S.

Foxconn changed plans for the Wisconsin plant several times, but ultimately settled on making masks during the pandemic — nothing electronics-related. The Wisconsin plant promised 13 jobs but created only 000.

During the pandemic, plans for the plant were abandoned and much of the facility remained unfinished.
Apple worked with Foxconn in 2011 to expand iPhone production to Brazil to avoid high import tariffs in that country. The plant is still operating and will produce iPhone 16 models to help Apple avoid U.S. tariffs, Brazilian media reported.

But even after the $12 billion plant opened, most components were still imported from Asia. In 2015, iPhones made in Brazil retailed for twice as much as those made in China, according to Reuters.

But recent efforts by Taiwan Semiconductor Manufacturing Co. (TSMC), Apple's primary chip maker, have been successful. TSMC now makes small batches of advanced chips at a new plant in Arizona, and Apple is a regular customer.

Most of the parts are from Asia

Even if iPhones are assembled in America, many of the components will come from different countries that are subject to trade tariffs.

Most of the iPhone's parts are made in Asia. The processor is made by TSMC in Taiwan, the display comes from South Korean companies like LG or Samsung, and most other components are made in China.

Apple faces tariffs on most of these parts unless it gets waivers, according to Bank of America Securities' Mohan. Semiconductors, some of the iPhone's most valuable components, are currently exempt from tariffs.

Trump suspended most of his trade levies for 9 days on April 90, but if the pause ends, the US-made iPhone 16 Pro Max could become 91% more expensive due to tariffs and rising labor costs, Mohan wrote.

"While moving final assembly to the US is possible, moving the entire iPhone supply chain is a much more complex task that would likely take years, if it is feasible at all," Mohan said.
While Jobs categorically rejected the idea of ​​an American iPhone in a conversation with Obama, Cook was not so direct.

Instead, Cook has focused Apple’s strategy on engaging with Trump, including attending his inauguration in January. Apple has announced it will spend $500 billion domestically, including to build some AI servers in Houston. Trump regularly cites these investments with approval.

During Trump's first term, Cook's strategy worked.

While Trump talked about patriotic iPhones and Apple factories in the US, the company was able to get temporary exemptions for many of its products made in China. This meant that Apple did not pay tariffs on important devices like the iPhone.

In the fall of 2019, Apple extended its commitment to build the $3000 Mac Pro at its Flex plant near Austin, Texas. Trump toured the plant with Cook.

Before Apple commits to a red, white and blue iPhone, the company may begin making some less mainstream products or accessories in the U.S. to woo Trump, Wall Street analysts say.

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