The policy mechanism
Section 301 tariffs — first levied by the U.S. Trade Representative under the Trade Act of 1974 and extended and expanded across multiple administrations — impose duties as high as 25% on Chinese-origin electronics, including smartphones, laptops, and the component categories that feed them. For a company that still sources the majority of its iPhone final assembly from Foxconn and Pegatron facilities in Zhengzhou and Shenzhen, those duties are not a rounding error. They are a structural tax on the bill of materials. Every device that clears U.S. Customs bearing a Chinese country-of-origin declaration arrives with a cost penalty baked in. The math is simple: either absorb it in margin, pass it to the consumer, or move the factory.
Washington chose the policy. Wall Street is now pricing who executes the exit fastest.