Apple (AAPL, Financial) is unlikely to start U.S. production of iPhones overnight, despite pressures from the U.S. government. Shifting the supply chain domestically would be a costly and time-consuming process, taking decades to develop domestic manufacturing capabilities.
The U.S. government has recently suspended reciprocal tariffs for 90 days, exempting products like smartphones and laptops, but has imposed stricter tariffs on Chinese goods. This move has significant implications for Apple, as the ongoing trade tensions could lead to higher prices for products like iPhones and MacBooks, potentially dampening demand and impacting Apple's stock performance. As of this year, Apple shares have fallen by 22%.
Even with tariff exemptions, the overall macroeconomic concerns related to the U.S.-China trade war could slow down economic growth in these key markets, affecting Apple's revenue. Analysts indicate that consumer spending might decline due to these economic uncertainties.
Despite investing $500 billion in a new U.S. manufacturing facility, Apple has not committed to producing consumer hardware domestically. CEO Tim Cook previously cited skill gaps in the U.S. manufacturing sector as a barrier to local production.
