Everything is getting worse and worse: iPhone production costs could increase by 90 percent

Analysts at Bank of America have warned that moving iPhone assembly from China to the US could increase production costs by up to 90 percent. They add that while it is technically possible to assemble iPhone models in America, it would significantly increase costs and create logistical complications.

“The price of an iPhone could increase by 25 percent just because of higher labor costs in the U.S.,” the analysts wrote in a note to clients. They explained that even if Apple finds local workers for final assembly, “a significant portion” of iPhone components would still have to be manufactured in China and imported to the U.S., according to MacRumors, citing a Bloomberg article.

Assuming Apple faces retaliatory tariffs on imported components, total manufacturing costs could rise by 90 percent or more, analysts estimate. The analysis comes after US President Donald Trump said earlier this week that Apple's production of devices in China was "unsustainable."

According to White House spokeswoman Caroline Leavitt, Trump "absolutely" believes that Apple can manufacture the iPhone in the U.S. During a press conference, Leavitt said the president believes the U.S. "has the manpower and the resources to make it happen."

For assembly in the US to be economically viable for Apple, analysts say the company would need an exemption from tariffs on components made abroad. However, they do not see this as likely.

"Unless it becomes clear how long the new tariffs will last, we do not expect Apple to take the step of moving production to the US. Instead, Apple is more likely to continue to diversify its supply chain and also increase iPhone production in other countries such as India," the analysis said.

Apple has yet to officially say how it plans to handle the current tariff situation. Apple will have to pay a 125 percent tariff on all goods coming from China to the US, but it can import devices from other countries like India, Taiwan, and Vietnam at a lower tariff of 10 percent. /Telegraph/