America first: this is how Trump will change Apple (but is that a good thing?)

Donald Trump has won the 2024 US presidential election by a wide margin, but is that good or bad news for Apple? The company will notice this in its second presidential term.

Import duties under Trump

The American presidential elections on Tuesday, November 5, 2024 were won comfortably by Donald Trump. The former and future president has big plans for the country. He even speaks of a golden age for the United States under his rule. To make that happen, he has several ideas that should improve the economy. An important part of those plans is the introduction of import tariffs.

Trump plans to do this in order to close – or at least reduce – the gap between imports and exports on the American market. The future president has indicated that he wants to introduce an import tariff of at least ten percent. Does the product come from China? Then even a levy of sixty percent applies. That is a huge import tax, which iPhone users will certainly notice. With these tariffs, Trump also affects large companies such as Apple.

Trump also hits Apple

Apple’s products consist of a huge number of components, many of which are manufactured abroad. For example, many iPhones are made in China, which are subject to the import tariffs that Trump wants to introduce. This means that the price of the iPhone may rise significantly due to the new taxes. Apple can avoid Trump’s import tariffs in several ways to prevent the prices of all products from rising.

One of Trump’s goals is to strengthen the domestic economy and industry. The import tariffs should therefore make it more interesting to manufacture parts in the United States. Apple may choose to move production of iPhones, iPads and Macs to the United States. The devices are then made domestically and are not subject to the import duty of ten to sixty percent.

iPhones, iPads and Macs are becoming more expensive

That is exactly what Trump wants, because in this way more jobs will be created in the United States. Yet this is easier said than done, because Apple needs a lot of time to move all these productions to the United States. It would take years to move the entire production process domestically. For the time being, Apple remains dependent on foreign parts, which will become more expensive under Trump’s policies.

There is a good chance that we will see this price increase reflected in the starting price of the iPhone. If production costs rise, in this case due to import tariffs, Apple passes this on to the prices of the devices. That means the iPhone, iPad, Mac, Apple Watch, Apple TV and all other Apple products will become more expensive worldwide. In addition, the European Union may also impose import tariffs on American products, in response to Trump’s tariffs.

Apple may have an exceptional position

This means that, in the worst case scenario, we will have to pay even more for new Apple devices in the Netherlands and Belgium from 2025 onwards. Yet there is still hope, because there is a chance that Apple will receive an exceptional position under Trump’s policy. The same thing happened during his first term, when Trump also made an exception to the rules for Apple. This may happen again in 2025, especially if Apple shows that it is already moving production.

Apple is becoming less and less dependent on China, the company now has more factories in India and Brazil. Products from these countries have a much lower import tariff, which means Apple will place more emphasis on this from next year. This may be enough reason for Trump to (temporarily) exempt Apple from the high import duties on products from China.

Tim Cook and Donald Trump

Another big advantage for Apple is the contact that Tim Cook and Donald Trump have. They had good contact during Trump’s first term and it appears they have maintained this contact. For example, Tim Cook talked to both Kamala Harris and Donald Trump prior to the American elections. During these conversations, he undoubtedly defended Apple’s interests. After the presidential election, Tim Cook was quick to congratulate Trump.

In addition, Trump has already indicated that exceptions apply to large tech companies such as Google and Apple. For example, Google does not have to be divided into smaller companies during his presidency, which was the case previously. Yet Apple is far from certain of this exceptional position, just as it is not yet clear which tariffs Trump will ultimately impose.

If Trump does indeed impose import tariffs, the question is to what extent this will affect Apple. The consequences under Trump will hopefully not be too bad for Apple. And not only for the company, but also for all users worldwide. After all, these are the most expensive if Apple is hit by the high import duties. We won’t know for sure until after January 20, when Trump is officially president.