President Donald Trump believes that Apple is capable of producing its iconic iPhone in the U.S. to sidestep new tariffs. However, analyst Laura Martin from Needham remains skeptical.
Martin expressed her doubts on CNBC’s “The Exchange,” responding to a statement from White House Press Secretary Karoline Leavitt regarding the possibility of Apple shifting its iPhone manufacturing to the U.S.
According to Martin, the costs for Apple would soar if they opted to manufacture their flagship product domestically. This concern is echoed by other Wall Street analysts, with Wedbush’s Dan Ives estimating that an iPhone would cost $3,500 if made in the U.S.
Moreover, Martin emphasized that transitioning Apple’s supply chain to the U.S. would require several years, and many supply chain experts assert that producing iPhones entirely in the U.S. is not feasible.
When asked about the possibility of moving iPhone production, Leavitt stated that Trump aims to create manufacturing jobs in the U.S. and believes the country possesses the workforce and resources necessary for domestic smartphone production.
Leavitt added, “He believes we have the labor, we have the workforce, we have the resources to do it,” remarking that Apple has already invested $500 billion in the United States. “If Apple didn’t think the United States could do it, they probably wouldn’t have committed that significant amount.”
Her comments coincided with a sell-off of Apple shares as investors reacted to the company’s reliance on Chinese manufacturing. Following Trump’s retaliatory tariff measures, China faces a cumulative tariff rate of 104%. Countries like India and Vietnam, where Apple also has manufacturing operations, are similarly affected.
In total, Martin predicts that Trump’s tariffs could elevate Apple’s costs by approximately 50%.
Challenges for Apple Stock
On Tuesday, Apple shares experienced volatility, ultimately dropping nearly 2%. Over the past five trading days, the stock has plummeted around 20% as investors evaluated the implications of Trump’s policies for the prominent manufacturer of iPhones and iPads.
Apple, 5-day
On Monday, UBS projected that Trump’s reciprocal tariff strategy could necessitate Apple raising the price of its premium iPhone model, the 16 Pro Max, by up to $350 for U.S. consumers. Martin cautioned that if Apple were to pass these cost increases onto American consumers, it could drive inflation higher.
For investors, Martin recommended a cautious approach before purchasing on the dip.
Many analysts have yet to revise their earnings predictions for Apple due to the uncertainties surrounding trade policy. Martin indicated that traders might face further declines if the tariffs are implemented as currently proposed or if other unexpected challenges arise.
“There are numerous potential worst-case scenarios for Apple,” explained Martin, citing retaliatory actions from China or a potential invasion of Taiwan as examples.
— CNBC’s Kif Leswing contributed to this report.
Secure Your Spot at Pro LIVE
Join us at the New York Stock Exchange!|
In uncertain market conditions, gain valuable insights with CNBC Pro LIVE, an exclusive inaugural event at the historic New York Stock Exchange. As a CNBC Pro subscriber, we invite you to attend our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12.
Participate in interactive Pro clinics led by our experts Carter Worth, Dan Niles, and Dan Ives, with a special Pro Talks edition featuring Tom Lee. You’ll also have the chance to network with CNBC professionals, talent, and fellow Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
