Bank of America: If Apple Inc. (AAPL.US) were to produce iPhones in the United States, costs could soar by 90%.

Bank of America Corp pointed out that Apple Inc. may potentially move the production of the iPhone to the United States, but not only would this almost double the manufacturing cost of the devices, it would also bring about many logistical challenges. A team led by Bank of America analyst Wamsi Mohan wrote in a report to clients on Wednesday, "Simply due to higher labor costs in the U.S., the cost of the iPhone could increase by 25%." Although the tech giant could find labor in the U.S. responsible for assembling the iPhone, a "substantial part" of the components used in manufacturing the iPhone would still be assembled in China and then imported to the U.S. They estimate that if Apple Inc. had to pay equivalent tariffs for these imported components, the total cost would rise by 90% or even more. This estimation comes at a time when President Donald Trump is focusing the trade war on China. The Trump administration has suspended the implementation of equivalent tariffs on dozens of countries for 90 days, but tariffs on China have been raised to 125%. At the same time, China has retaliated by imposing an 84% tariff on American goods. Despite this news causing Apple Inc. stock to rise significantly, increasing by over 10%, marking its best single-day performance since July 2020. However, Apple Inc. stock has suffered a heavy blow this year, with a cumulative decline of 23%, and since Trump announced the tariff policy on April 2, the stock has fallen by 14%, causing a market value loss of $479 billion. Rosenblatt Securities issued a warning last week that tariffs could cause a "collapse" in Apple Inc. stock. Wade Bush Securities analyst Dan Eves, who is bullish on tech stocks long-term, lowered Apple Inc.'s target stock price and stated that the tariff war would be a "complete disaster" for Apple Inc. Meanwhile, consumers rushed to buy the product last weekend out of concern for a price increase in the iPhone. Bank of America analyst Mohan wrote that for Apple Inc. to make the final assembly of the iPhone viable in the U.S., tariffs exemptions would need to be given for components and semi-finished products manufactured abroad. However, he believes this scenario is unlikely to happen. Mohan maintains a "buy" rating on Apple Inc. stock with a target price of $250, while the current Apple Inc. stock price is at $199. He stated, "Unless the sustainability of the new tariff policy becomes clear, we do not expect Apple Inc. to take the step of moving production to the U.S. However, we expect Apple Inc. to continue diversifying its supply chain and increasing iPhone production in other countries such as India."