How will US tariffs affect the price of iPhones in Singapore?

Note: This article was first published on 7 April 2025.

Note: This article was written by Alyssa Woo and first appeared in The Straits Times on 5 April 2025.

Singapore has been hit with a baseline 10 per cent tariff on its goods imported to the US, but the effects are likely to be more wide-ranging for the export-oriented, regionally plugged in country as its Asian neighbours grapple with the higher tariffs imposed.

China has been hit by the highest overall tariffs at 54 per cent, followed by Cambodia at 49 per cent, and Vietnam at 46 per cent. Thailand has been hit by tariffs at 36 per cent, Indonesia and Taiwan at 32 per cent each, Malaysia at 24 per cent, and the Philippines at 17 per cent.

Given that US companies either buy many or part of their raw materials from overseas, or manufacture them partially before finishing it in the US before it is sold, it is likely that the tariffs will affect the prices of the things people here buy, and, eventually, wages and jobs.

Will prices rise?

Apple fans here are likely to feel the bite and pay more for its iPhones, iPads and laptops. The US consumer tech company ticks many of the boxes as a candidate for raising the prices of its goods under the new tariff regime.

Like other electronics manufacturers, it has a complicated global supply chain, which has a strong impact on prices.  

Assistant professor of economics Mei Yuan at the Singapore Management University said: “For electronics, where parts of production involve input from the US, then it gets more complicated. And if Apple relocates its production line because China or other countries retaliate with reciprocal tariffs, the global supply chain will get disrupted, and then Singapore consumers will face higher prices for sure.”

There have been some media articles suggesting Apple could get product exemptions on US tariffs, the way it did in 2019. If it does not, Morgan Stanley analyst Erik Woodring told CNBC that to offset the price of the tariffs, Apple may have to raise prices across its product lines by 17 per cent to 18 per cent in the US (some even predict price hikes as high as 43 per cent).

The Apple product you have has likely been manufactured in China, India, Japan, South Korea, Taiwan or Vietnam.

Taiwanese company Foxconn manufactured about two out of every three iPhones in 2023, though Apple started to diversify production, and contracted manufacturers and local suppliers in India as well. According to media reports, Apple exported iPhones worth 1.08 trillion rupees (S$17.06 billion) from India in 2024.

A November 2024 filing by Apple had already said that restrictions on international trade, such as tariffs and other controls on imports or exports of goods, technology or data, can materially adversely affect its business and supply chain.

Such restrictive measures can increase the cost of Apple products and the components and raw materials that go into them, which may require the company to take various actions including changing suppliers, restructuring business relationships and operations, and ceasing to offer and distribute affected products, services and third-party applications to its customers, it added in the filing.

For retail goods like sportswear and shoes, however, there could be a bit of a reprieve, with prices expected to hold, given that many US consumer and clothing brands manufacture much of their goods overseas in Asian countries such as China, Vietnam and Bangladesh.

American sportswear company Nike had 155 factories in Vietnam on its list of suppliers as at June 2024, producing half its footwear and about 30 per cent of apparel there in its 2024 financial year.

Rival sportswear company Adidas produces 97 per cent of its total 2023 footwear volume in Asia, according to the company’s 2023 annual report. It also listed Vietnam as its main sourcing country for footwear, accounting for 39 per cent of its footwear in 2024, and 18 per cent of its apparel.

While that likely means higher prices for US consumers when those products are imported over from Asia, consumers here in Singapore should technically not see much change in the prices of goods that are made and shipped from factories in Asia.

It is also unlikely that such companies would relocate all their factories back to North America, where production costs are much higher, said Prof Mei.

Apart from prices, Singapore consumers may have to live with a smaller range of products offered in the medium to longer term.

For instance, Prof Mei said: “Apple produces certain models of iPhones in China or India, but because of tariffs, it may not be profitable to produce certain phone models there anymore, and too expensive to produce in America, so maybe Apple has no choice but to shut down those production lines and these models become unavailable to other countries.”

Will jobs and wages take a hit?

Expect fewer job opportunities or smaller pay packages from multinational companies, or a hiring freeze, said analysts.

“This is a major event. This will likely bring the US into a recession or substantially slow down its economic growth, and that could have substantial repercussions,” said Prof Mei. “And with that expectation, it’s possible that some large multinational companies have a hiring freeze in the season when college graduates try to find jobs. They may see fewer job opportunities from the MNCs.”

But he added: “It’s unlikely for a firm to reduce an employee’s salary. The easier way is to let people go in a downturn. I don’t see a decrease in salary, but slower or smaller raises or pay packages, or a hiring freeze.”

OCBC Bank’s chief economist Selena Ling said that jobs in Singapore “may be impacted if businesses put on hold their capital expenditure or hiring plans amid the heightened uncertainties, especially for those industries or companies that have significant exposure to the US market”.

Certain goods are exempted from the reciprocal tariffs – namely copper, pharmaceuticals, semiconductors, lumber products, bullion, energy and  certain other minerals – although sectoral tariffs may be on the way, added Ms Ling, who is also the bank’s head of global markets research and strategy.

“In terms of wages and job opportunities, there is likely to be increased caution by employers mainly because of the additional hoops and hurdles that businesses need to navigate amid the tariffs, retaliatory measures and dents to confidence levels,” she noted.

Source: The Straits Times

Read next: Analysts say US tariffs could increase iPhone prices by up to 43%