JPMorgan says tariffs would be on all smartphones, not just iPhone

JPMorgan keeps a Overweight rating on Apple (AAPL) after President Trump indicated earlier this morning the likelihood of a tariff of at least 25% on iPhones sold in the U.S. from an international manufacturing footprint, irrespective of country of origin. Tariffs would have to be on smartphones overall, rather than iPhones alone, putting Apple in a better position on a relative basis, the analyst tells investors in a research note. JPMorgan believes Apple’s pricing power with consumers as well as suppliers would position the company favorably relative to peers, rather than at a disadvantage. Further, the firm believes 25% tariffs “could be passed on successfully.” The 25% tariff on U.S. iPhones implies the need for global pricing of about 5% or $50 on an individual iPhone, which is “within the realm of typical price increases” Apple has taken in the past, contends JPMorgan. It believes moving manufacturing/ assembly to U.S. is challenging, likely driving Apple “to live with tariffs and price increases near term while waiting for more stability in policy.”