Morgan Stanley's analysis suggests that a 25% tariff imposed by the U.S. on imported Apple (AAPL, Financial) iPhones is unlikely to motivate the company to relocate production back to the U.S. Producing iPhones domestically would be 35% more expensive than manufacturing in China or India, outweighing the tariff's potential 4% to 6% price increase.
However, the bank warns that this tariff could strain relations between Apple's CEO Tim Cook and the current U.S. administration, potentially escalating tariff risks for the company. Building new iPhone assembly lines in the U.S. could take over two years and cost billions of dollars.
