Trump’s tariffs shake up smartphone supply chains

As global smartphone giants Samsung Electronics and Apple face sweeping tariffs of 40-50 % under US President Donald Trump's "reciprocal" tariffs, impacting all countries involved in the two companies' supply chains, attention is turning to whether Samsung could gain a comparative advantage over its American archrival.

With Samsung manufacturing in Vietnam and other countries that face relatively lower tariffs than China, where Apple produces the majority of its products, experts say the Korean tech giant may be better positioned due to its more diversified production base.

Currently, Samsung produces over 100 million smartphones annually — more than 50 % of its total output — at its factories in Bac Ninh and Thai Nguyen, Vietnam, which are subject to a 43 % tariff under Trump’s measures. About 30 % of Samsung’s smartphones are made in India, which faces a 26 % tariff, while the remainder are produced in Brazil, Indonesia and Gumi, South Korea. Trump's "reciprocal" tariffs stand at 10 percent for Brazil, 32 % for Indonesia and 25 % for South Korea.

Apple, in contrast, manufactures roughly 90 % of its iPhones in China, which faces a 54 % effective tariff, combining Trump's new 34 % "reciprocal" tariff and the existing 20 % tariff.

Should Apple choose to pass the additional costs on to consumers, analysts predict that the price of the iPhone 16 series could rise by 30 to 40 %. According to projections by Rosenblatt Securities, the high-end iPhone 16 Pro Max model, featuring a 6.9-inch display and 1 terabyte of storage, could be priced at nearly $2,300 in the US — an increase of 43 % from the current $1,599. The base model of the flagship iPhone 16 could jump from $799 to as much as $1,142 in the US.

For Samsung, which ships most of its US-bound smartphones from its Vietnamese factories, experts suggest shifting production to countries with lower tariff burdens, such as Brazil and South Korea.

“Samsung has the option to manufacture US volumes in Korea or Brazil, where tariffs are relatively lower,” said Kyung Hee-kwon, a research fellow at the Korea Institute for Industrial Economics and Trade.

Trump’s latest social media post has also raised expectations for a potential tariff removal for Vietnam, which could ease the burden on Samsung.

On his Truth Social platform on Friday, Trump wrote, "Just had a very productive call with To Lam, General Secretary of the Communist Party of Vietnam, who told me that Vietnam wants to cut their tariffs down to ZERO if they can agree with the US."

According to industry sources, Samsung had already shipped its latest Galaxy S25 series to the US before the new tariffs were announced on April 2. However, for the upcoming foldable Galaxy Z Fold and Galaxy Z Flip models, Samsung will need to find ways to mitigate the impact of the tariffs.

In the US market, Samsung currently holds about a 20 % market share, and industry watchers say maintaining that level amid the new tariffs would be considered a success.

At the same time, experts caution that Trump may again grant tariff exemptions to Apple, as he did during his first term. If such exemptions are granted, Samsung’s smartphone sales in the US could face a serious crisis, they warn.

Apple has actively courted the Trump administration, announcing plans in February to invest $500 billion in the US over the next four years. This includes the construction of a major AI server facility in Texas and the hiring of approximately 20,000 new employees.

Some also view the tariffs as a strategic move by Trump to gain concessions, especially as he has stated that tariffs “give us great power to negotiate.”

Lee Kyu-hee, a senior researcher at NICE Investors Service, said the impact on Apple could be “limited,” considering Trump’s prioritization of domestic companies’ interests.

Apple was exempted from tariffs during Trump’s first term. If the US continues to implement tariff policies favoring American companies, Korean firms may face growing pressure to relocate production bases to the US,” Lee wrote in a report released in March.

The Korea Herald

Asia News Network