Written by Haider Saleem
Financial and Political Analyst | LinkedIn / X

A top-of-the-line iPhone currently costs around $1,200. But recent policy threats from the United States could push that price to an eye-watering $3,500 – not because of a new feature or a sleeker design, but because of politics.

In May 2025, President Donald Trump announced plans to impose a 25% tariff on all iPhones sold in the U.S. that are not manufactured domestically. The goal: force Apple to “bring jobs home” by assembling its most popular product in the United States. 

There is worry that the result would be sharply higher prices for consumers and a complex supply chain crisis for Apple.

This article explores:

1. Trump’s renewed tariff threats and what they mean for smartphones.
2. Why producing iPhones in the U.S. could be economically unfeasible.
3. How Apple’s current global supply chain functions.
4. The likely impact on global consumers.
5. Apple’s halal stock status under AAOIFI methodology.

1. Trump’s Tariff Push: iPhones in the Crossfire

President Trump’s trade agenda has returned with force. In a recent post on Truth Social, he reiterated that Apple must manufacture iPhones in the U.S., not in India or elsewhere. If not, he said, “a tariff of at least 25% must be paid” on each unit sold in America.

The tariff threats come as part of a broader re-escalation of trade tensions. Trump has warned of further levies – up to 50% – on all goods from the European Union, arguing that foreign manufacturing undermines U.S. industry.

These tariffs are expected to be justified under the International Emergency Economic Powers Act (IEEPA), a law that grants the president sweeping powers to declare economic emergencies and impose import restrictions.

Why do governments use tariffs? Tariffs are typically applied to protect domestic industries, reduce trade deficits, or exert economic pressure on trading partners. However, they can also raise consumer prices and disrupt global supply chains.

2. Why a U.S.-Made iPhone Could Cost $3,500

Analysts say that making iPhones in the U.S. is not impossible, but it would be vastly more expensive. Dan Ives of Wedbush Securities estimates the cost of an American-assembled iPhone could exceed $3,500 due to the complexity of Apple’s supply chain and the high cost of labor and manufacturing infrastructure in the U.S.

Building just 10% of Apple’s supply chain in the United States would cost around $30 billion and take at least three years, Ives noted. That’s without accounting for the skilled workforce needed to produce the devices — a resource in short supply compared to Asia.

The cost gap includes:

• Higher wages for skilled labor
  
• Need for expensive automation equipment
  
• Lack of existing supplier clusters and logistical support
  

Past efforts offer cautionary lessons. In 2013, Apple attempted to assemble Mac computers in Texas. Production halted when the company couldn’t find enough tiny screws in the U.S., and many workers left assembly lines early due to labor issues.

3. Apple’s Supply Chain: Why Asia is King

Over the past decade, Apple has diversified its production away from China, with India and Vietnam emerging as new manufacturing hubs. Still, more than 80% of iPhones are produced in China, especially when it comes to the most complex components like chips, screens, and Face ID modules.

For context:

• Apple’s chips are mainly made in Taiwan
  
• Displays come from South Korea
  
• Subassemblies (e.g. Face ID modules) are produced in China
  
• Final assembly has only recently begun expanding into India and Vietnam

Even devices labelled “assembled in India” often rely on Chinese-made subcomponents. These parts are sent to India for final assembly to take advantage of local incentives and to avoid tariffs – a tactic that helps Apple maintain margins without fully decoupling from China.

What makes Asia so attractive? It’s not just cost. Its capability:Skilled labor trained in electronics assembly Massive seasonal workforces Clusters of component suppliers within a short distance of major plants Engineering depth: China alone has more tooling engineers than the U.S. by a factor of thousands

As Apple’s former design manager Matthew Moore put it, “You can’t just pick it up and move it.”

4. The Global Price Tag: Who Pays for a Trade War?

Should the tariffs proceed, Apple may initially absorb some costs. But anything above a 30% tariff threshold could eventually be passed on to consumers, according to analyst Gene Munster.

That means price hikes won’t just hit U.S. buyers – they could ripple across Apple’s global markets. For consumers in developing economies and price-sensitive regions, including many Muslim-majority nations, even a modest rise in price could push iPhones out of reach.

On the investment side, tariffs have already spooked markets. Apple shares fell by nearly 3% following the announcement, with broader indices like the S&P 500 and Europe’s DAX also dipping in response to tariff fears.

5. Halal Screening: Apple Is Compliant under AAOIFI

For Muslim investors interested in Apple stock (AAPL), the company currently meets the financial ratio thresholds set by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). AAOIFI is a globally recognized standard-setter in Islamic finance, and its criteria are used by scholars and platforms around the world.

These thresholds typically screen for:

• Interest-bearing debt (must be below 30% of market cap)
  
• Interest income (must be below 5% of revenue)
  
• Non-compliant business activity (must fall below a defined limit)

To explore the detailed halal screening report for Apple, you can refer to Musaffa’s screening page, which evaluates AAPL based on AAOIFI standards.

6. Conclusion: More Than a Price Hike

The $3,500 iPhone may sound extreme, but it captures a deeper shift in global trade dynamics. If tariffs escalate, consumers could face higher prices, investors may experience increased volatility, and manufacturers like Apple will continue navigating a complex web of politics, policy, and production.

For Muslim investors tracking ethical and financial considerations, platforms like Musaffa offer tools to assess how companies respond to these global pressures while staying compliant with Islamic values.

Future developments to watch include Apple’s next earnings call and any White House trade updates that could redefine the company’s manufacturing and pricing strategy.

References

1. “‘Little, little screws’ one of many hurdles to US-made iPhones,” Reuters, 23 May 2025.
2. “iPhone could triple in price to $3,500 if they’re made in the US,” CNN, 23 May 2025.
3. “Is Trump’s ‘Made in America’ iPhone a Fantasy?” The New York Times, 23 May 2025.
4. “Trump threatens tariffs on Apple iPhones and EU products,” BBC News, 23 May 2025.

Musaffa, “Apple Inc. Halal Screening,” https://musaffa.com/stock/AAPL

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