Trump Threatens Tariffs on iPhones Not Made in the USA as Apple Expands Production in India
In a bold move, President Donald Trump has expressed his displeasure over Apple's decision to increase its manufacturing presence in India for iPhones, insisting on a stronger emphasis on American production. His latest post on the social media platform Truth Social issued a warning that could significantly impact the price of iPhones sold in the United States, igniting a debate on manufacturing, tariffs, and consumer costs.
President Donald Trump is adamant about seeing a "Made in USA" label on the iPhone. This morning, he shared a post on Truth Social threatening Apple and American consumers with a tariff of 25% or higher on all iPhone units imported into the U.S. that are not made domestically. The president appears to be well aware of Apple's strategies to navigate the existing tariffs on Chinese exports, which include iPhones and other devices assembled in China.
Earlier this month, during Apple's earnings call, CEO Tim Cook disclosed that "the majority of iPhones sold in the US will have India as their country of origin." Although tariffs on smartphones have been suspended, a 10% tariff continues to apply to many imported goods, while tariffs on Chinese products were slashed from as high as 145% down to 30% this month.
Challenges of Recreating the iPhone Supply Chain in America
In his social media post, Trump specifically called for a "tariff of at least 25%" on iPhones imported to the United States, with exceptions only for devices "built in the United States, not India or anyplace else." Despite his previously positive rapport with Tim Cook—having discussed the possibility of relocating iPhone manufacturing to the U.S.—Trump might be overlooking the reality that Americans may be reluctant to accept low-wage assembly jobs. The logistical challenges of establishing a complete supply chain for iPhone production in the U.S. also cannot be underestimated.
Trump's remark on Truth Social regarding imposing a 25% tariff on iPhones not made in the USA could lead to significant price increases. | Image credit-Truth Social
Should Apple yield to Trump's demands, the resultant cost of maintaining U.S. production facilities and sourcing materials will inevitably lead to inflated iPhone prices. Conversely, if Apple opts to keep production overseas, the proposed tariffs will also drive up prices, causing discontent among buyers. In either scenario, Trump may find himself at the center of widespread blame for escalating iPhone costs, given the phone's dominant market position in the U.S.
Dan Ives, a tech analyst at Wedbush Securities, suggests that if Apple were to produce the iPhone in the U.S., prices could skyrocket to an astounding $3,500 per device. He remarked, "You build that (supply chain) in the US with a fab in West Virginia and New Jersey, they'll be $3,500 iPhones," during a CNN interview last month.
Trump's persistent push to relocate iPhone manufacturing to the U.S. was reiterated during a recent trip to Qatar, where he expressed his disapproval about Apple's expansion in India directly to Tim Cook.
Bringing Precision Manufacturing Back to the U.S.
Treasury Secretary Scott Bessent elaborated on the President's goals on Fox News, indicating that Trump desires to "bring back precision manufacturing to the U.S." Regardless of the choices Apple makes, the ramifications of this debate are complex and multifaceted.
While it is not unusual for a U.S. president to encourage American companies to produce domestically, the challenges involved in fulfilling such requests must be understood. Former President Obama faced similar discussions with the late Steve Jobs, who highlighted the lack of qualified engineers in the U.S. during their meeting in 2010, attributing it to the educational system's shortcomings.
