National Economic Council Director: Apple’s iPhone Tariffs Won’t Burden Consumers; Describes Them as a ‘Tiny Amount’ Relative to Potential Impact

Apple Faces 25% Tariff Risk Amid U. S.Manufacturing Push

The Trump administration has intensified its efforts to compel Apple to relocate its iPhone manufacturing to the United States. Failure to comply could result in a significant 25% tariff on imported iPhones. Such tariffs would likely lead Apple to increase retail prices for consumers, as every iPhone shipped from abroad would incur higher costs. Despite this, the Director of the National Economic Council has controversially claimed that these tariffs will be absorbed by Apple, rather than passed on to consumers—an assertion met with skepticism given that increased costs traditionally affect end-users.

Understanding the Government’s Stance on Tariffs

In an interview with CNBC’s Squawk Box, AppleInsider reported remarks from Kevin Hassett that raised eyebrows. President Trump has previously expressed personal admiration for Apple CEO Tim Cook but urges the company to focus on domestic manufacturing rather than expanding facilities in markets like India. Hassett referred to the imposed tariffs as “minuscule.” However, analysts argue these tariffs could impose substantial costs on Apple’s gross margins, contrary to Hassett’s characterization.

“Everybody is trying to make it seem like it’s a catastrophe if there’s a tiny little tariff on them right now, to try to negotiate down the tariffs. In the end, we’ll see what happens, we’ll see what the update is, but we don’t want to harm Apple.”

Potential Implications for Apple’s Investment Strategy

While Apple has yet to respond to Hassett’s comments, the National Economic Council Director may exert limited influence over the company’s operational decisions. The U. S.government could enforce regulations that penalize companies if tariffs are shifted onto consumers. These developments pose a serious risk to Apple’s commitment to invest $500 billion in the U. S.over the next four years, as imposed tariffs could compel the company to reevaluate its financial strategy.

“If you think that Apple has a factory some place that’s got a set number of iPhones that it produces and it needs to sell them no matter what, then Apple will bear those tariffs, not consumers, because it’s an elastic supply.”

Market Reactions and Analyst Perspectives

Ming-Chi Kuo, a noted TF International Securities analyst, suggested that if Apple prioritizes its profitability, absorbing the 25% tariffs might be more feasible than shifting production back to the U. S.This aligns with insights from Bloomberg’s Mark Gurman, who noted that the likelihood of iPhones being produced domestically is slim, particularly due to the elevated labor costs that would necessitate significant retail price increases.

Conclusion

As Apple navigates these challenges, the tech giant’s future production and pricing strategies will attract ongoing scrutiny. The unfolding situation reflects not only the complexities of U. S.trade policy but also the competitive pressures facing one of the world’s most valuable companies.

For more information on this developing story, visit CNBC.

Additional insights can be found at Wccftech.