The unfolding drama surrounding possible tariffs on iPhones continues. Following Trump’s warning to Apple about a further 25% tariff on iPhones, the worst-case scenario might cause the price of the priciest model in the series to surpass $4,000.
Nevertheless, a federal court has determined that the president lacks the legal power to levy tariffs at all, much less the extreme ones he has suggested, and has overturned the executive orders issued thus far.
## The Backstory
Over a span of two months, the Trump administration proclaimed tariffs on goods produced in China that commenced at 10% and escalated to 145%. An exemption for consumer electronics was subsequently introduced, but the administration later indicated that this would be strictly temporary. Given that most Apple products are manufactured in China, this could lead to significant price hikes in the US.
Earlier this month, Trump escalated matters once more by threatening an additional 25% tariff directed towards Apple, ostensibly as retaliation for CEO Tim Cook turning down an invitation to partake in his Middle East tour. Trump later walked back his focus on Apple, indicating it would also impact other companies.
## Federal Court Blocks Trump Tariffs
CNET reports that the US Court of International Trade has now invalidated all of Trump’s executive directives, adjudging that the president overstepped his bounds – only Congress possesses the authority to impose or alter tariffs on international trade.
The three-judge panel at the New York-based US Court of International Trade determined that Congress has exclusive jurisdiction to manage commerce with foreign nations and that the International Emergency Economic Powers Act of 1977 — the cornerstone of Trump’s rationale for imposing the tariffs — does not grant the president “unfettered” authority to impose these duties.
“An unrestricted delegation of tariff power would represent an inappropriate abdication of legislative responsibility to another governmental branch,” the court stated in its judgment. “The contested Tariff Orders will be annulled and their enforcement permanently restrained.”
Trump is unlikely to acquiesce to the ruling, indicating a tumultuous period ahead as American governmental bodies and companies must navigate conflicting assertions surrounding tariffs.
## Worst-Case Tariffs See iPhone Hit $4K
In a separate article, CNET has been calculating various scenarios. In the direst case, the cost of the most expensive iPhone in the series would exceed $4k.
There are numerous uncertainties involved. On what grounds would tariffs be applied? Would Apple opt to cover some of the costs, or shift them entirely to consumers? What percentage of iPhones could Apple source from India to circumvent the elements tied to China?
All these factors render CNET’s calculations quite speculative, but here are several instances. Initially, applying the 10% tariff on imports from India, followed by the proposed 26% rate. For China, starting with the present 30% tariff, then with the suggested 145%, using the least and most expensive current models as examples:
| | Current price | +10% (India) | +26% (India) | +30% (China) | +145% (China) |
|———————–|—————|—————|—————|—————|—————-|
| iPhone 16E (128GB) | $599 | $659 | $755 | $779 | $1,468 |
| iPhone 16 Pro Max (1TB)| $1,599 | $1,759 | $2,015 | $2,079 | $3,918 |
With the added 25% tariff that Trump has threatened on Apple (as well as other smartphone manufacturers):
| | Current price | +10% (India) | +26% (India) | +30% (China) | +145% (China) |
|———————–|—————|—————|—————|—————|—————-|
| iPhone 16E (128GB) | $599 | $809 | $904 | $928 | $1,617 |
| iPhone 16 Pro Max (1TB)| $1,599 | $2,159 | $2,414 | $2,478 | $4,317 |
## 9to5Mac’s Take
Clearly, the upper limits indicated would be utterly unfeasible, as no one would agree to pay those amounts. A Trump advisor has mentioned that Apple would absorb 100% of the increases, but that too would evidently be impossible at the heightened rates.
I’ve consistently argued that there are three reasons these worst-case scenarios will not materialize, and the US Court of International Trade has now introduced a fourth: they would be unlawful.
