Apple drops a big hint on whether it plans to have consumers pay higher iPhone tariffs

At least for now, before Apple starts importing phones from its Chinese warehouses and pays the new import tax when they land in the U.S., demand for the iPhone in the states has picked up dramatically. A new report from Bloomberg cites Apple Store employees who say that the retail locations in the U.S. were jam-packed over the weekend with consumers looking to price iPhone models before President Donald Trump's tariffs force Apple to make a tough decision.

Apple has a very tough decision to make with one killing the stock and the other hitting customers in their wallets

The tech giant can either decide to commit equity suicide, eat the additional tax, lower its profit margin, and send its stock dropping to prices we haven't seen in years, or pass on the additional cost to consumers. The latter would mean that Apple would have to impose the dreaded price hike on its most important product. Of course, some type of combination is also possible.

With the president threatening to jack up the tariff on China by an additional 50% (which would take the total amount of the country's import tax to 104%), iPhone prices could triple. And last night China decided to respond with a statement that it will "fight to the end," not exactly the words that someone in the market for a new iPhone wants to hear. Apple Store employees say that customers are worried and are asking questions about the tariffs and iPhone pricing. "Almost every customer asked me if prices were going to go up soon," said one.

This time of the year is considered a slow season for iPhone sales. That makes the frenetic actions of shoppers inside U.S. Apple Stores seem even stranger than they appear. Even consumers who were holding off the purchases of their next iPhone until September when the iPhone 17 line is released are deciding to buy an iPhone 16 model now before prices rise.

For its part, for three days during the last week of March, Apple flew five planes full of iPhones from China and India to the U.S. This news came from senior Indian officials who told the Times of India. The same story in that publication states that Apple has no plans to raise iPhone prices in India or in any other market due to the tariffs. Of course, should we see Trump raise tariffs to even higher levels, Apple might not be able to hold that line.

Apple could be forced to squeeze suppliers

To beat the imposition of higher import taxes in the U.S. as ordered by President Trump, Apple has been moving iPhone inventory out of China and India to the United States. This stockpiling is actually the reason why Apple is able to keep prices at current levels since the units arrived in the U.S. before Wednesday, April 9th when the 34% tariff on Chinese imports kicks in. As we noted earlier in this article, there could be an additional 50% tacked on unless China reverses the 34% tariff it placed on U.S. imports into the country. Trump has imposed a 26% reciprocal tariff on imports to the U.S. from India which also starts April 9th.

At this point, all we can say is that if you are thinking about buying an iPhone you might want to make the purchase now before all current inventory in the U.S. is exhausted. At that point, when this stockpile is replenished, the new tariffs will be charged on those handsets. 

There is a major indication that Apple plans to eat most or all of the additional tariffs charged on iPhone shipments to the U.S. Bloomberg has reported that to reduce the cost of building an iPhone to keep its profit margin high, Apple might be forced to squeeze its suppliers to lower the prices that they are charged for components. If this is legit and Apple is working to prop up iPhone profit margins, it suggests that the company plans on paying most of the additional tax itself.