$2,150 for an iPhone? Apple faces crisis with tariff wars and ensuing 'Category 5 price storm'

$2,150 for an iPhone?

- Dan Milmo

The AI-generated video of tired-looking Americans making mobile phones, which circulated widely on social media this week, was a pointed vision of a post-tariff world. But Donald Trump wants it to become reality for Apple.

The iPhone maker is one of the biggest victims of the US president's realignment of the global trading order because its flagship product is assembled in the centre of Trump's protectionist ire - China.

"The iPhone is a quintessential representative of a global supply chain," said Fraser Johnson, a professor at Ivey business school in Canada and an expert on the Apple supply chain.

More than 1,000 components from all over the world go into an iPhone but they are largely put together in China. Apple is secretive about its production details but analysts estimate that about 90% of its iPhones are assembled in the country.

This is deeply problematic for the California-based firm because Trump has imposed "reciprocal" tariffs - a tax on imports - of 125% on goods imported into the US from China. On Thursday it became clear a separate 20% fentanyl-linked border tax would be levied on top of this, taking the total burden to 145%. Apple faces paying a hefty sum on any iPhone brought into the US, which is likely to be passed on to consumers in the form of higher prices.

Investors in one of America's golden stocks have panicked at the prospect of its sales suffering as a consequence. Although shares in Apple have recovered some of their losses since Trump's "liberation day" announcement on 2 April, the company had still lost more than $300bn (£230bn) in value as of the start of trading yesterday.