Apple avoided the tariffs under Trump's first term, but that relationship seems to have soured.
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26 Feb 2025 02:25:24 am.
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</DIVicture>(Image credit: Apple)
The upcoming US Silicon Tariffs are expected to causeprice increases on tech hardware, with price hikes of up to 40%.
We've seen a few responses now from hardware manufacturers likeAcerandLenovo.Acer is raising prices by 10%and moving manufacturing outside of China to assist in insulation from the Chinese manufacturing and silicon tariffs. Lenovo believes its multi-national manufacturing footprint makes the company flexible enough to have some insulation from the tariffs.
Apple has a different planfor how to handle the tariffs, which comes as a surprise.Applewas immune to many of the silicon hardware tariffs that impacted the tech industry under the first Trump administration due to an investment in moving operations to the US, but thatpromised Austin, TX campus is still under construction.
Apple's new tariff mitigation plan is very similar but involves a steeper investment from Apple. This could indicate that the Cupertino tech giant doesn't expect a similar sweetheart deal in the second Trump term.
“We are bullish on the future of American innovation, and we’re proud to build on our long-standing U.S. investments with this $500 billion commitment to our country’s future,” Apple’s CEO Tim Cook stated for the announcement.
“From doubling our Advanced Manufacturing Fund, to building advanced technology in Texas, we’re thrilled to expand our support for American manufacturing. And we’ll keep working with people and companies across this country to help write an extraordinary new chapter in the history of American innovation.”
>>>Replacement battery for Apple iPhone 14 Plus
More servers, more staff, and a $500 Billion investment
Apple is launching a massive server factory in Houston, TX, and hiring 20,000 new US employees over the next four years.
The Houston server factory will create servers to supportApple Intelligence, as theAIsystem does include various Private Cloud Compute AI features.
Apple's manufacturing investment announcement reads, "As part of its new U.S. investments, Apple will work with manufacturing partners to begin production of servers in Houston later this year. A 250,000-square-foot server manufacturing facility, slated to open in 2026, will create thousands of jobs."
Apple's server manufacturing arm is currently sourced abroad.
Apple is also doubling its U.S. Advanced Manufacturing Fund, which was created in 2017. Apple originally invested $5 Billion in the Manufacturing Fund, making a total $10 Billion in funds with today's announcement.
"The fund’s expansion includes a multibillion-dollar commitment from Apple to produce advanced silicon in TSMC’s Fab 21 facility in Arizona."
Apple is the largest customer for TSMC's Fab 21 facility where "mass production of Apple chips began last month."
Apple is also growing US-based R&D and creating a Manufacturing Academy in Detroit, MI.
>>>Replacement battery for Apple iPhone 14 Pro
What you need to know about the tech tariffs
The 25% Silicon tariffs are not yet confirmed. However, a recent report fromReutersindicates the chip tariffs would start at "25% or higher" and increase over the course of the year.
This 25% tariff, combined with a 10% tariff on goods manufactured in China, is the driving force behind the 40% price increase predictions for consumer tech.
If you're considering updating any of your tech devices, it may be worth it to upgrade now rather than wait to see how the tariffs shake out. However, nothing is currently set in stone.
Tags: Apple
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