iPhones Must Be Made in America or Face 25% Tariff: Trump Warns Apple
United States President Donald Trump has issued a stern warning to Apple CEO Tim Cook, asserting that iPhones sold in the U.S. must be manufactured domestically, not in India or any other foreign country. Failing this, Trump cautioned, Apple would be required to pay a minimum 25% tariff on those products. This development presents a potential setback to Apple’s plans to expand iPhone manufacturing operations in India.
“I informed Tim Cook a long time ago that iPhones sold in America must be made in America, not in India or any other country,” Trump stated in a post on Truth Social on Friday. He added that if this directive is not followed, Apple would be subject to a tariff of at least 25% for importing iPhones into the United States. Following these statements, Apple’s shares dropped by over 3% in pre-market trading.
Trump’s comments come amid Apple’s efforts to shift its supply chain away from China due to previous tariffs imposed by his administration. As part of this diversification, Apple has been increasingly moving iPhone manufacturing to India, a strategy that Trump indicated he disapproves of. During his recent Middle East tour, Trump remarked, “Yesterday, I had a minor issue with Tim Cook. He is massively manufacturing in India. I don’t like that you're producing in India,” Trump said. He claimed that as a result of their discussions, Apple would increase its manufacturing within the United States.
Trump’s latest remarks and the threat of tariffs add to the geopolitical and economic tensions surrounding Apple's supply chain strategy. The company had been aiming to source a significant portion of iPhones for the American market from India by the end of next year, in an effort to reduce its reliance on China. Currently, Apple manufactures most of its iPhones in China and does not operate large-scale smartphone production facilities in the United States.
Since severe COVID-19 lockdowns disrupted production at Apple’s largest plant in China, the company and its suppliers have been accelerating their shift away from the world’s second-largest economy. In India, most iPhones are assembled at the Foxconn Technology Group factory in South India. The Tata Group, which acquired Wistron Corporation’s local business and operates Pegatron Corporation’s facilities, also plays a significant role in Apple's supply chain. According to a previous Bloomberg News report, Tata and Foxconn are building new plants in South India to boost production capacity.
In the twelve months leading up to March, Apple assembled iPhones worth $22 billion in India, marking an almost 60% increase from the previous year. With Trump’s latest warning, it remains to be seen how Apple will recalibrate its future manufacturing strategies.