Your next iPhone and Mac might cost a whole lot more
Are you saving up for a new Mac, iPhone, or iPad this year? You might need to save more money than you were planning, especially if you live in the U.S. That’s if President Trump’s plan to impose tariffs on computer chips goes into effect.
On Monday, Trump announced that tariffs of up to 100 percent could be imposed on chips, though he did not provide any specific details. The tariffs would affect nearly every tech company, including Apple, which relies on TSMC to produce the system on a chip at the heart of its products. TSMC is based in Taiwan, and the company gets 70 percent of its revenue from North American companies that import its chips.
When a government imposes an import tariff, the company pays the government a fee for the ability to import that product into the U.S. To cover the cost, the company will almost certainly raise the price of the product to the consumer. In Apple’s case, the company could raise the price of Macs, iPhones, and iPads to cover the tariff imposed on the M- and A-series chips in those products that are made by TSMC. Apple’s other chips, such as its S-series (Apple Watch, HomePod) and H-series (AirPods), could also be affected.
Apple has been making efforts for chip production in the U.S., which could put the company in a better position should tariffs go into effect. Two weeks ago, Nikkei Asia reported that TSMC’s plant in Arizona was in the final stage of verifying chips made at the plant. The first batch of chips made at this plant is expected to be “as early as this quarter” and Apple is expected to be TSMC’s largest customer of the Arizona plant.
It’s not clear which chips will be made in the U.S. to start, but they are said to be lower-volume older processors. CNBC reports that the plant will manufacture 4nm chips, which corresponds to older Apple chips and not the current enhanced 3nm M4, the standard 3nm M3, or the enhanced 3nm A18 used in current Macs and iPhones. TSMC is building another fab in Arizona, which will reportedly be able to create 2nm chips, but it will not be ready until 2030. However, Apple is in a stronger position to quickly shift at least some of TSMC’s Taiwan fabrication to the U.S.
However, Trump’s announcement and its lack of details essentially equates to a trial balloon. The government’s effort to increase chip production in the U.S. originated before Trump’s presidency, and Trump’s announcement could be a negotiating tactic and a way to push companies to increase their U.S. efforts. Furthermore, tech CEOs have been cozying up to President Trump to start his second term, with Tim Cook reportedly donating $1 million of his own money to Trump’s inauguration fund and attending the festivities.
The Consumer Technology Association issued a report in January that examined Trump’s tariff proposals. The report states that there are two proposals: a 10 percent tariff on all imports from all countries and a 60 percent tariff on all imports from China; or a 20 percent tariff on all imports from all countries and a 100 percent tariff on all imports from China. The CTA calculated that the tariffs would result in consumer price increases of laptops and tablets by 46-68 percent, and smartphones by 26-37 percent.
