US President Donald Trump has imposed reciprocal tariffs on almost every country in the world. He promises to bring jobs back to the US and wants to protect domestic manufacturers from cheaper competition from abroad.
Economists and businesses warn that the reality is likely to be much more complicated. The US economy could pay the price for the trade war. And the president will have a particularly hard time explaining why Americans are having to pay significantly more in stores.
There have been conflicting messages coming out of the White House about whether the tariffs should be permanent or are just a tactic to extract concessions. Trump himself has said that they"give us great negotiating power."
If the rest of the world were to engage in a trade war (China announced retaliatory tariffs of 34 percent on all US goods, ed.), US inflation would jump.
More expensive electronics
The iPhone maker fell nearly 10 percent on Thursday and another 3 percent on Friday, wiping $400 billion off its value on the stock market. The reason is Trump's tariff policy.
The majority of iPhone production is concentrated in China. Trump has imposed a 54 percent tariff on imports from China. Apple also makes its products in Vietnam and India, which have also been hit with high tariffs.
Analysts at Rosenblatt Securities expect Apple to have to raise the prices of its products because the tariffs will increase its costs by nearly $40 billion annually.
In the case of the iPhone and Apple Watch, prices for American customers could go up by 43 percent after the introduction of tariffs, in the case of iPads by 42 percent, and in the case of AirPods and Mac computers by 39 percent.
The cheapest iPhone model currently sells for $599, but after the price increase, the new price would be $856. In the case of the more expensive iPhone 16 Pro Max, which sells for $1,599 in the US, the new price would reach $2,300.
Besides China, Vietnam and Taiwan are the largest exporters of computers and tablets. According to the US Department of Commerce, these three countries shipped a total of $47.2 billion worth of computers and tablets to the US last year.
Ed Brzytwa, vice president of international trade for the Consumer Technology Association, told CNN that it would take three to four months for current stockpiles at retailers to dry up. Americans could feel the price hikes as early as the end of the summer break as they prepare for the new school year.
More expensive food
Up to 80 percent of coffee beans imported into the U.S. come from Latin American countries, mainly Colombia and Brazil. Coffee will be more expensive because these countries face a 10 percent tariff.
