Apple managed to keep Trump’s tariffs off its back, but the cost is still coming, and this time it’s landing directly on customers.
According to the briefing document obtained, CEO Tim Cook offered President Donald Trump a $100 billion sweetener to protect Apple’s supply chain.
In return, Trump gave Apple a pass on semiconductor tariffs that could have doubled chip prices. Tim handed Trump a gold-and-glass plaque in front of reporters last month, calling it a thank-you “for putting American innovation and American jobs front and center.”
That moment boosted Apple’s total U.S. investment pledge to $600 billion over five years. But behind the optics, the company’s preparing to raise iPhone prices anyway, and not by accident.
Analysts expect Apple to announce four new iPhones on Tuesday under the iPhone 17 label. And despite the White House exemption, the price of at least one model is likely going up.
“A lot of the chatter is: Will the iPhone go up in price?” said Jeff Fieldhack, research director at CounterPoint. The answer seems to be yes. Jeffries analyst Edison Lee already factored in a $50 hike in his average selling price forecast. He still rates Apple as a hold.
Apple changes strategy as tariffs hit other tech
While smartphones haven’t seen price bumps yet, other sectors have. Console makers Sony, Microsoft, and Nintendo all raised prices on hardware this year. Tariff pressure has also pushed up costs in shoes, clothing, and food. Lee and other Wall Street analysts say Apple is next.
Goldman Sachs pointed out that Apple’s sales mix is already tilting toward more expensive models, which raises the average price per phone even without across-the-board hikes. The firm also noted that this year’s new models may include a redesigned, thinner device replacing the sluggish iPhone 16 Plus.
That new slim phone could trade camera features and battery size for a sleeker body, but it’s still expected to cost $899, the same price as the old Plus. That still comes in cheaper than Samsung’s comparable Galaxy Edge, which launched at $1,099.
Goldman analysts said the slimmer build “may drive some demand interest,” but the cuts to battery and camera performance may hurt its appeal versus base models. There’s still a chance that even this thinner model could get a higher price tag, though that hasn’t been confirmed.
Tim hasn’t said anything public about price changes. On a May earnings call, he simply said, “there was nothing to announce,” adding, “the operational team has done an incredible job around optimizing the supply chain and the inventory.”
Apple avoids full tariff damage but cost shows up in pricing
Back in February, Trump triggered sweeping tariffs aimed at China, Vietnam, India, and others. Apple’s exposure was massive. Most of its phones are made in China, and Vietnam and India are where the company has started moving production to avoid political risk. If fully applied, the tariffs could have pushed Apple’s component and assembly costs through the roof.
Instead, the U.S. paused some of the harsher moves. Smartphones got exempted entirely. And in May, Tim told investors Apple had rerouted supply chains, importing more units from India. He also leaned heavily on his relationship with Trump, including a high-profile White House visit in August. During that meeting, Trump promised Apple an exemption from another round of chip tariffs. Even though the IEEPA tariffs were later ruled illegal, they remain active. And Apple is still paying.
The company reported $800 million in tariff-related costs for the June quarter, almost all of it tied to IEEPA measures targeting Chinese goods. While that’s under 4% of Apple’s profits, Tim warned the number could reach $1.1 billion in the current quarter.
Now, rather than continue eating those losses, Apple may push the costs onto customers. The company has done it before. In 2020, it raised the starting price of its base iPhone from $699 to $829. In 2022, Apple removed the cheaper iPhone Mini and added the larger Plus model at $899. In 2023, the iPhone Pro Max jumped from $1,099 to $1,199.
JPMorgan analysts expect Apple to repeat that strategy. This time, they believe Apple will cut the entry-level iPhone 17 Pro — the $999 version with 128GB of storage — and make the 256GB model the new base, priced at $1,099. Since Apple typically charges $100 to double storage, removing the lower-tier version is a silent way to increase pricing without changing the top-line number.
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