In a surprising turn of events, a US federal court has curbed the former President’s aggressive trade ambitions, ruling that his attempts to unilaterally impose tariffs on imported goods, including products from tech giant Apple, exceeded his executive authority. This decision potentially shields companies like Apple from potentially crippling tariffs.
The ruling comes after escalating threats from the ex-President, who, just last week, reportedly warned Apple CEO Tim Cook of a minimum 25% tariff on iPhones if manufacturing wasn’t brought stateside. The implications of this stance extended beyond Apple, encompassing other prominent smartphone manufacturers like Samsung.
The market reacted swiftly and decisively. Following the court’s determination, global equities surged. Early trading witnessed a robust rally, with S&P 500 futures climbing 1.4% and Dow Jones Industrial Average futures advancing 1.1%, signaling a sigh of relief from investors.
Analysts have painted a stark picture of the financial repercussions had the tariffs been implemented. Projections suggest that the top-end 1TB iPhone 16 Pro Max could have seen its retail price balloon from roughly $1,599 to over $4,300. Even the entry-level 128GB iPhone 16e was forecast to potentially reach a cost of $1,617, putting considerable strain on consumers.
Furthermore, the logistical hurdles surrounding a shift of iPhone production to the US are immense. Even for a company as cash-rich as Apple, establishing large-scale manufacturing operations from scratch domestically would present a monumental challenge, virtually impossible to achieve in the short term.
Dan Ives, a highly regarded analyst at Wedbush Securities, in a recently released report, estimated that transitioning iPhone production to the United States would require a staggering five to ten years. He further suggested that the end result could be a retail price for each iPhone of approximately $3,500, a price point that would likely have drastically altered consumer behavior.
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