The new deal slashes U.S. tariffs on Chinese goods from 145% down to 30% and Chinese tariffs on U.S. goods from 125% to 10%. Apple shares rose 7% in premarket trading after optimism on the tariff cut. The stock surge was just one part of a wider tech rally as Nvidia also gaining nearly 5%.

President Donald Trump on Monday spoke to Apple CEO Tim Cook after a big deal was signed between the U.S. and China to reduce tariffs. The step follows months of trade tensions that escalated to the point that tariffs were skyrocketing on both sides. Trump said Cook will open more Apple facilities in the U.S. with no specific details of what will be done. The agreement is considered a respite to Apple that has suffered massive cost hikes with the tariffs.

Price hikes coming for new iPhones?

According to The Wall Street Journal, Apple might increase the price of its next line of iPhones. Although Apple has not confirmed the rise, analysts think it is a reaction to increased production costs. The iPhone 16 could rise from $799 up to $1,142. Apple may justify the increase with new features and a thinner profile.

The Amazon Haul division was under fire last month by the Trump administration after they planned to send the tariff costs to consumers. The White House described the move as politically motivated. The incident points toward a larger effect of tariffs on the U.S. businesses and their pricing strategies.

Apple’s shift to India production

Apple’s CEO Tim Cook earlier this month said the company would shift production of iPhones destined for the U.S. to India. This decision came after the massive increase of the tariff on Chinese goods. Cook said the tariffs would increase Apple’s costs by $900 million in the current quarter. From now on, most iPhones sold on the U.S. market will be produced in India.

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