Bank of America analysts warned on Wednesday that relocating iPhone production from China to the United States could lead to a staggering 90% increase in manufacturing costs.
According to a note led by analyst Wamsi Mohan, while moving iPhone assembly to American soil is technically feasible, it would trigger dramatic cost increases and create complex logistical challenges.
The analysis reveals that labor costs alone would drive up iPhone production expenses by 25% in the US market. Adding to the complexity, a large portion of iPhone components would still need to be manufactured in China and imported, potentially facing steep reciprocal tariffs.
The report comes after President Trump's recent statements calling Apple's manufacturing in China "unsustainable." White House press secretary Karoline Leavitt backed the President's position, stating that the US has the necessary workforce and resources for domestic iPhone production.
The ongoing trade tensions have impacted Apple significantly, with its stock dropping 14% since Trump's April tariff announcement, wiping out approximately $479 billion in market value. Despite a recent 10% recovery, Apple shares remain down 23% this year.
The current trade landscape shows the US imposing 125% duties on Chinese imports while pausing tariffs for 185 other countries. In response, China has implemented 84% retaliatory levies on American goods.
BofA analysts suggest that for US production to become economically viable, Apple would need tariff exemptions on foreign-made components. However, they view this as unlikely and expect Apple to continue diversifying its supply chain by increasing production in countries like India.
Under current regulations, Apple faces 125% tariffs on China-sourced goods but only 10% on imports from countries such as India, Taiwan, and Vietnam.