iPhones May Soon Carry Car-Sized Price Tags As US Tariffs Escalate

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The cost of owning the latest iPhone could soon rival that of a new car, thanks to escalating tariffs imposed by the United States on Chinese imports. With Apple heavily reliant on a global supply chain—components sourced from Taiwan, South Korea, Japan, the US, and assembled in China—the tech giant finds itself at the epicenter of this trade turmoil.

Recently, the US administration slapped a whopping 145% tariff on Chinese imports — made up of a 125% general tariff and an extra 20% tagged as a “fentanyl border tax.” While smartphones and other tech products were temporarily spared, they’re still caught under that 20% bracket. If those exemptions vanish, analysts estimate the iPhone 16 Pro Max could shoot up from USD 1,199 to around USD 2,150. That’s roughly RM10,200 at current rates.

Apple faces a dilemma to absorb the increased costs or pass them on to consumers. Relocating production to the US is deemed impractical due to exorbitant costs, potentially elevating the price of an iPhone to USD 3,500.  In response, Apple is ramping up production in India and utilizing chartered flights to transport iPhones to the US, aiming to mitigate the impact of tariffs.

Malaysia’s Semiconductor Industry in the Spotlight

Amid this global supply chain upheaval, Malaysia’s semiconductor industry emerges as a pivotal player. Accounting for approximately 13% of global semiconductor testing and packaging, Malaysia is the sixth-largest semiconductor exporter worldwide. The nation aims to double its semiconductor exports to RM1.2 trillion (USD 270 billion) by 2030, bolstered by government investments and strategic partnerships with global tech firms.

The Malaysian government is investing RM25 billion (approximately USD 5.6 billion) to enhance its semiconductor sector, focusing on advanced packaging, integrated circuit design, and smart manufacturing. This initiative includes establishing a new chip-design hub in Selangor and collaborating with industry leaders like Cadence Design Systems and Arm Holdings.

How This All Trickles Down to Your Wallet

Rising tariffs aren’t just a headache for tech giants, but they’re a warning sign for all of us. As trade tensions ramp up, so do the costs of staying plugged in. And while Malaysia and others are stepping up to keep things moving, the entire global supply chain is being forced to rethink how and where things get made. This isn’t just about iPhones, though. It’s about who holds the power in tomorrow’s tech economy.

For consumers, this could mean higher prices for smartphones and other electronics. For countries like Malaysia, it presents an opportunity to solidify their position in the global semiconductor market, provided they can navigate the challenges and seize the moment.