As the U.S. administration under President Donald Trump announced tariffs on imported goods to the United States, the potential rise in smartphone prices has become a concern for American consumers.
The variation in tariff rates based on the country of smartphone manufacturing further increases uncertainty.
As is the case with all smartphone brands in the U.S., South Korea’s Samsung also has to pay taxes to the U.S. government for importing its products into the country.
The company doesn’t have an assembly line in the United States and is forced to ship its products from countries such as Brazil, Vietnam, and India to the U.S., making it vulnerable to hefty tariffs.
iPhone
Analysts previously predicted a potential 43% increase in iPhone prices due to these tariffs. Similarly, Samsung—facing the same inevitable cost increase—is expected to follow suit, according to a report by tech news site “Neowin,” reviewed by “Al Arabiya Business.”
In 2019, Samsung halted smartphone production in China due to rising competition from local brands and focused its efforts on Joint Design and Manufacturing (JDM) through partnerships with local manufacturers. Imports from China to the U.S. are subject to a 54% tariff.
Currently, a large portion of Samsung’s phones are produced in Vietnam and exported to the U.S. Vietnam, located in Southeast Asia, is Samsung’s largest manufacturing partner, accounting for around 45-60% of its global production.
However, imports from Vietnam to the U.S. are now subject to a 46% tariff.
Samsung
Samsung also operates assembly lines in India, Brazil, and South Korea, each of which is subject to different tariff rates.
Among these countries, Brazil faces the lowest tariff (10%), making shifting production there a potentially smart move for Samsung.
It’s also reported that Apple is considering expanding iPhone production in Brazil to lessen the tariff impact on customers.
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