Apple Faces Price Hikes Due to Tariff Impact

Due to recent tariffs imposed by the Trump administration, Apple may need to raise prices on iPhones, iPads, and other products by approximately 9% to offset the financial impact, according to Bank of America analyst Wamsi Mohan. These tariffs include a 10% charge on imports from China, where a significant portion of Apple's products are manufactured. If Apple absorbs the tariffs without adjusting prices, it could face a 26-cent drop in earnings per share, a 3.1% decline. Conversely, a 3% price increase would still result in a 21-cent drop in earnings, equating to a 2.4% decline due to potentially reduced sales. The tariffs also affect production in India, complicating Apple's strategy to diversify its manufacturing base. The reciprocal tariffs plan aims to level trade barriers, impacting Apple's ability to mitigate costs by shifting production locations.