Trump “25% tariff on iPhone”… Samsung also hit directly by tariff bomb
President Trump Pressuring Apple's Production In The U.S. (Source: Bloomberg)
U.S. President Donald Trump has publicly announced his policy to impose at least 25% tariffs on Apple and Samsung's smartphones manufactured abroad. There is a possibility of implementation from late June, and it is expected to have a significant impact on the global smartphone market.
On the 23rd (local time), President Trump posted on his social media Truth Social that he had long ago informed Apple CEO Tim Cook that he hopes the iPhones sold in the U.S. will be manufactured in the U.S., not in India or other countries, and warned that “Apple will have to pay at least 25% tariffs” otherwise. On the same day, the White House indicated the possibility of expanding tariffs, saying, “Companies producing products abroad, including Samsung, will also be targeted.”
This measure is expected to have a direct impact not only on Apple but also on Samsung Electronics. Samsung currently manufactures smartphones in Gumi, Vietnam, India, Brazil, and Indonesia and does not have production facilities in the U.S. As of the fourth quarter of last year, Samsung's smartphone market share in the U.S. was 18%, ranking second after Apple (65%).
The industry analysis suggests that it is realistically difficult for both Apple and Samsung to relocate their production bases to the U.S. Dan Ives of Wedbush Securities said, “Moving the supply chain to the U.S. would make the iPhone price reach $3,500,” and that “moving even just 10% of the entire supply chain would require $30 billion and at least three years.” Apple also announced in its performance report that a cost increase of about $900 million is expected due to tariffs in the second quarter.
Samsung Electronics also finds it difficult to avoid the impact of tariffs. Reflecting tariffs in prices could lead to decreased sales, and bearing tariffs itself would deteriorate profitability. Last year, Samsung's smartphone division's operating profit margin was 9.1%, relatively lower than Apple's 31%. Especially since Samsung has a higher proportion of the budget-friendly Galaxy A series than premium products, it is more sensitive to price increases.
According to the industry, Samsung is addressing products released in the first half with existing inventory and sees that new products, including foldable phones scheduled for the second half, could fall under the influence of tariffs.
President Trump's remarks draw attention as a factor that could not only reorganize the global smartphone supply chain but also escalate U.S.-China and U.S.-India trade tensions. Future specific measures by the U.S. government and the responses of companies are expected to act as important variables.