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Samsung and Apple in the crosshairs as Trump targets smartphone tariffs

Published: 25 May. 2025, 18:25 Updated: 25 May. 2025, 20:19

President Donald Trump holds his phone as he speaks to reporters after signing executive orders regarding nuclear energy in the Oval Office of the White House on May 23, 2025, in Washington. [AP/YONHAP]

U.S. President Donald Trump has revived his tariff campaign, this time taking aim at smartphones. Samsung Electronics and Apple are on red alert ahead of their new model release set for July and September, respectively.

Trump announced that starting in late June, a 25 percent tariff would be imposed on smartphones imported into the United States. He specifically named Apple and Samsung.

This follows earlier item-specific tariffs that were imposed on steel, aluminum and automobiles.

Smartphones in the bad books

Trump on Friday reaffirmed his plan to impose tariffs on smartphones manufactured overseas during a press briefing at the White House.

Earlier that morning, he posted a personal reprimand toward Tim Cook, CEO of Apple, on Truth Social.

"I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else," wrote Trump. "If that is not the case, a Tariff of at least 25 percent must be paid by Apple to the U.S."

The Truth social network logo is seen on a smartphone in front of a display of U.S. President Donald Trump in this picture illustration taken on Feb. 21, 2022. [REUTERS/YONHAP]

He also singled out Samsung.

“It would be also Samsung and anybody that makes that product, otherwise it wouldn’t be fair,” Trump said later on the day at the White House to reporters. “Again, when they build their plants here [in the United States], there's no tariff."

“That includes companies like Samsung and others that make the product,” Trump told reporters. “If they make it here [in the United States], there’s no tariff — otherwise, it’s unfair.”

Earlier last month, smartphones and other electronics had been excluded from the global reciprocal tariffs announced on April 2, but the new move effectively reinstates product-specific levies.

People browse iPhones at the Apple Fifth Avenue store, in New York City, on May 23, 2025. [REUTERS/YONHAP]

Still, market sentiment already favors the view that Apple will not move its production to the United States.

“In terms of profitability, it's way better for Apple to take the hit of a 25 percent tariff on iPhones sold in the U.S. market than to move iPhone assembly lines back to the United States,” wrote analyst Kuo Mingchi, known for covering Apple.

Analyst David Vogt at UBS, a Swiss investment bank, said that the potential 25 percent tariffs were a “jarring headline” but that they would only be a “modest headwind” to Apple’s earnings.

No winners or losers in this game

The electronics industry is watching closely as Trump once again invokes the notion of “unfairness.”

The new line of Samsung Galaxy S25 phones, with advanced camera and artificial intelligence capabilities, are unveiled at a media preview event in San Jose on Jan. 21, 2025. [AP/YONHAP]

In 2019, during Trump’s first term, Apple was granted tariff exemptions on certain components, while Samsung avoided China-related tariffs due to its manufacturing bases in Vietnam and India. Trump then argued that Apple should be treated the same as Samsung, granting Apple exemptions on some parts.

Now, Trump is placing equal pressure on both companies, removing the preferential treatment once extended to Apple. For Samsung, this represents a more balanced playing field.

“This smartphone tariff applies equally to Samsung and Apple, so it can’t be said that it favors or disadvantages a particular company,” said an industry insider.

Cruel summer for smartphones

Concerns are growing that the tariff could suppress smartphone demand. If tariffs are imposed, price hikes may follow, possibly lengthening replacement cycles and expanding the used phone market. Over time, this could dent profits for both Samsung and Apple.

A view of Apple iPhones displayed at an Apple Store at Grand Central Terminal in New York City, New York, Oct. 16, 2024. [REUTERS/YONHAP]

Samsung faces particular challenges as it prepares to unveil its new foldable phone in New York in July.

Foldables are priced higher than standard bar-type smartphones, and since Apple has not yet entered the category, Samsung has positioned these devices to aggressively target the U.S. market.

The company must now navigate the impact of tariffs on pricing, sales volume and profit margins. According to market research firm Counterpoint Research, Apple led the U.S. smartphone market in the fourth quarter of last year with a 65 percent share, followed by Samsung with 18 percent.

Apple is facing similar dilemmas ahead of its typical September launch. While the company had shifted production of iPhones for the U.S. market to India in response to the earlier 10 percent general tariff, the burden remains. During an earnings call on May 1, Apple CEO Tim Cook said the company expects to face $900 million in tariff costs — assuming no further tariffs are imposed.

A screen advertising of Samsung Electronics' Galaxy S25 Ultra phone, with artificial intelligence capabilities, is seen at the Seoul Railway Station in central Seoul onFeb. 17, 2025. [AP/YONHAP]

If the 25 percent smartphone tariff takes effect, the financial burden is expected to rise even further.

“Reciprocal tariffs leave room for negotiation between countries, but product-specific tariffs have always been a consistent priority for Trump," said Kim Yang-paeng, a senior researcher at the Korea Institute for Industrial Economics & Trade.

"There is a high possibility that the tariffs will be imposed in reality. In the end, companies may have no choice but to raise retail prices in the U.S. market.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY LEE GA-RAM [[email protected]]