Analysts at Bank of America warned on Wednesday that moving iPhone production from China to the United States could increase Apple’s manufacturing costs by up to 90%, reports Bloomberg.
A group of BofA analysts led by Wamsi Mohan say moving iPhone assembly to America, while technically possible, would dramatically increase Apple’s production expenses, while also creating logistical complications.
“iPhone cost can increase 25% purely on higher labor cost in the U.S.,” the analysts told clients in a note. The group explained that even if Apple can find workers stateside for final assembly of the devices, a “significant portion” of iPhone components would still need to be manufactured in China and shipped to the States, meaning Apple would still face reciprocal tariffs on the components that are imported to the U.S. The analysts estimate that Apple’s total manufacturing cost could jump as much as 90% or more.
The analysis comes on the heels of President Trump saying earlier this week that Apple’s manufacturing in China was “unsustainable.” White House press secretary Karoline Leavitt also said this week that the President “absolutely” believes that Apple could assemble iPhones inside of U.S. borders. At a recent press briefing, Leavitt told reporters that Trump believes the U.S. has the workforce, the labor, and the resources to set up iPhone production in the U.S.
Trump has focused on China with his aggressive trade and tariff program. While he on Wednesday announced he would delay reciprocal tariffs on 185 countries for 90, he increased duties on goods imported from China to 125%. China responded by placing 84% retaliatory tariffs on American imports into the country.
Apple’s stock has taken a beating recently, falling 14% since President Trump’s April 2 tariff pronouncement. The plunge erased approximately $479 billion in market capitalization. While Apple shares have enjoyed a recent 10% rebound, AAPL shares remain down 23% so far this year.
Mohan suggest Apple would need tariff waivers on components and subassemblies manufactured outside the country to make U.S. assembly viable. However, he doesn’t see this happening.
“Unless it becomes clear as to how permanent the new tariffs are, we do not expect Apple to take the step of moving manufacturing into the U.S.,” Mohan said. He added that he anticipates Apple to “continue to diversify its supply chain, and also increase production of iPhones in other countries such as India.”
