Don’t blame tariffs for an iPhone price hike – blame Apple for betting the farm on China

By now, you’ve heard the media’s Greek chorus: Tariffs on Chinese goods will, in all likelihood, cause iPhone prices to soar. Apple, the implication goes, is caught in the crossfire — a good old American company just trying to make world-class gadgets while politicians ruin everything.

Of course, the truth is much more complicated than that.

Yes, tariffs are bad policy. They’re blunt, regressive, and hurt the very people they’re supposed to protect. Warren Buffett has described tariffs as an "act of war, to some degree." But let's set all that aside for a moment. Because the fact of the matter is that when it comes to Apple, iPhones, tariffs, and China, Apple isn’t a victim here. It’s actually an accomplice to its own vulnerability.

Apple built the tariff trap it’s now snared in

For more than two decades, Apple placed an enormous, calculated bet on China. Under CEO Tim Cook, the company offshored almost every part of its hardware operation. Assembly, components, labor, and the entire manufacturing ecosystem were yoked in large part to a single country, the People’s Republic of China.

Cook didn’t just outsource manufacturing. He optimized the heck out of it. He built a just-in-time machine that could move tens of millions of iPhones with robotic efficiency. Apple became a poster child for globalized tech production. Shareholders and Wall Street cheered. For quite a while, the going was good.

But what they were all really applauding, whether they realized it or not, was the concentration of risk — in a country that is increasingly hostile to US interests, intolerant of transparency, and known for playing politics with corporate access. Knowing that, let's keep in mind: