It seems that US President Trump's decision to impose hefty tariffs might be backfiring on American companies. For instance, Apple is now looking for ways to ditch the new tariffs since it imports goods from China—which has been hit with a 54% tariff. In response, China has retaliated with a 34% reciprocal tariff on the US.
As the trade war heats up, Apple is thinking of increasing its iPhone production in Brazil to avoid the new taxes set by the US government. According to Brazilian publication Exame, sources close to the matter reveal that expanding assembly lines in Brazil could be a better option for Apple. That's because US tariffs on Brazilian goods are only 10%, while goods from China and India face much higher taxes.
Apple is going to be one of the most affected companies because of the new tariffs, as it imports more than half of its iPhones from China. Because of this, US consumers might see a jump of about 30% to 40% in iPhone prices.
India, which recently became one of the key countries in Apple's supply chain, is also impacted because of the 26% tariff starting April 5. Apple sells over 220 million iPhones in a year, with the US being its largest market. The rise in tariffs also caused Apple shares to plummet more than 8%, the worst since September 2020.
Brazil could be a better option to avoid such losses, since Apple already assembles iPhones at a Foxconn factory in Jundial, Sao Paulo. The factory was also recently commissioned to manufacture the base model of the iPhone 16, although the Pro models will still be imported.
Increasing production in Brazil won't help reduce iPhone prices in the country, but it would help ship devices to the US with much lower tariffs. For Apple, Brazil could serve as plan B, as the country has declared a trade war (sort of) against other countries. However, it depends on whether the Jundial factory could handle increased production without delays and quality problems.
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