iPhones may soon become significantly more expensive in South Africa.
Image: Supplied/Apple
iPhones may soon become significantly more expensive in South Africa and around the world, as US President Donald Trump escalates a high-stakes trade war with China.
Trump has imposed a 30% tariff on South African goods, claiming that South Africa applies a 60% tariff on US imports, an accusation that has been disputed. Similar tariffs have also been introduced on goods from other countries.
However, on Wednesday, Trump announced a three-month suspension of all "reciprocal" tariffs, with the exception of those targeting China. He raised the tariff on Chinese goods from 104% to 125% after China introduced retaliatory tariffs against the United States earlier in the week.
"I am hereby raising the tariff charged to China by the United States of America to 125%, effective immediately. At some point, hopefully in the near future, China will realise that the days of ripping off the USA—and other countries—are no longer sustainable or acceptable," he said.
According to the Daily Mail, Apple’s devices are predominantly manufactured in China, with components sourced from around 50 countries, many of which have also been affected by the tariffs.
The report further states: “China is the main hub for iPhone assembly (80 percent), with India putting together 10–15 percent and Vietnam making up the bulk of the rest.”
Most of the components used to build the iPhone originate in countries such as South Korea, Japan, and Taiwan, among others.
The Trump administration has insisted that devices like the iPhone should be manufactured in the US to boost local employment, although experts and Apple itself have suggested that such a move is unrealistic.
Experts believe the ongoing trade war could result in significantly higher iPhone prices around the world, including in South Africa.
"Ultimately, Apple is interested in maintaining its growth margin, so increases in raw costs will predictably increase the cost of the iPhone. The Apple chief executive will then have two choices — do you put up the price, or take a hit on your growth margins?" Ben Barringer, global technology analyst at financial experts Quilter Cheviot, told MailOnline.
"My logic would say that the tariffs into the US impact the cost of making the iPhone, and the Chinese tariff will increase the retail price in China. Donald Trump's tariffs are ultimately bad news for consumer electronics," Barringer added.
IOL Business
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