Apple's tariff fight is about to become Samsung's big problem

Since the Trump administration took office in January, tariffs have become a word every American is familiar with.

President Trump promised on the campaign trail that he would aggressively use tariffs to negotiate trade deals he felt were too one-sided and that he would force companies to bring manufacturing back to the United States through steep new taxes on imported goods.

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Since the president took office, he’s taken steps to follow through on that plan, imposing – or threatening to impose – a series of tariffs on both specific types of goods and imports from specific countries.

He’s also been going after one particular business pretty hard: Apple. The president is very committed to convincing Apple to manufacture iPhones in the United States, despite the difficulties in shifting phone production onshore.

While the president has specifically directed his ire towards Apple for manufacturing the iPhone overseas, his tariff fight with Apple is about to become a big problem for Samsung, too.

Buying Samsung devices could soon cost more.

Image source: Shutterstock

Tariffs won’t just hit Apple – Samsung’s Galaxy phones could also be affected

Apple has been making overtures toward cooperating with President Trump on trade, and when the administration asked Apple to stop manufacturing iPhones in China, the tech company announced plans to shift production to India.

Of course, this wasn’t quite what the president was hoping for. In fact, he declared last week that any iPhones manufactured elsewhere would be subject to a 25% tariff if they are brought into the U.S. to be sold.

The issue, of course, is that the president’s power likely does not extend to targeting a single company or a single consumer device with a tariff. Instead, the most likely course of action would be to place tariffs on all smartphones imported into the U.S., or at least all phones made in India or other specific locations.

That’s where the problem comes for Samsung. The company manufactures its popular line of Galaxy phones in India as well as in Vietnam. So, those phones would very likely also be hit with the added tariff when they are brought back into the country for U.S. consumption.

Galaxy phones could cost a whole lot more if the tariff goes into effect

A 25% tariff would have a major impact on the cost of manufacturing Samsung’s devices, and the company is very unlikely to just absorb this price increase without passing the added expense onto phone buyers.

As a result, a report from Korean media projects that Samsung phones could cost as much as 40% more in the United States in the event that the threatened tariffs go into effect. This could put the price of these phones out of reach for many U.S. consumers or result in larger monthly costs for those financing phones through their carriers.

Earlier reports have indicated that Qualcomm may also raise the price of the Snapdragon 8 Elite Gen 2, the processor used in many Samsung devices, so this new tariff threat inspired by the president’s fight with Apple may only worsen Samsung’s production-cost woes.

For its part, Apple is very unlikely to be able to move the production of the iPhone to the U.S., as doing so would likely push the price of the phone much higher than most people would be willing to pay. In addition, the transition would take so much time that the president may be out of office before it concludes.

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So, if President Trump is truly committed to imposing these tariffs, and if Apple doesn’t do the seemingly impossible, Samsung will almost assuredly be caught in the crosshairs. And consumers hoping for a Galaxy phone may have to open their wallets a little wider to get one.