Making iPhones in Brazil will help Apple dodge Trump tariffs
What's the story
Apple is said to be planning a major expansion of its iPhone production in Brazil.
The move, if it happens, would be part of a strategy to offset the impact of new tariffs imposed by the US government on imports from China and India.
The Cupertino-based tech giant has been assembling iPhones in Brazil since 2011, mainly focusing on entry-level models for the local market.
Facility upgrade
Upgrading Brazilian facility for broader production
According to Brazilian publication Exame, Apple is considering expanding the use of its Sao Paulo facility in partnership with Taiwanese manufacturer Foxconn.
The company has been improving equipment and production processes at the site since last year.
The idea is not just to serve Brazilian consumers but also to export devices back to the US.
Tariff benefits
Brazil's tariffs make it an attractive option for Apple
Brazil's telecom regulator, Anatel, recently approved Apple and Foxconn to assemble the iPhone 16 locally.
Although Brazil already assembles older models like the iPhone 13, 14, and 15, this would be the first time Apple may produce iPhone 16 Pro models in the country.
The move is driven by Brazil's relatively low tariff of just 10%, making it a more appealing alternative for Apple over China and India.
Price impact
Analysts predict significant price hikes for Apple products
Analysts at Rosenblatt Securities have predicted Trump's tariffs could cost Apple as much as $40 billion.
They estimate the cheapest iPhone 16 model, which currently costs $799 in the US, could be priced as high as $1,142 — a price hike of nearly 43%.
iPhone 16 Pro Max and other Apple devices like MacBooks could also witness similar price hikes if the costs are passed onto consumers.