Apple Inc Stock Plunges After Trump’s 25% Tariff Threat – What’s Next for Investors?

Apple Inc. (NASDAQ: AAPL) saw its stock drop 2.76% on May 23, 2025, following Donald Trump’s announcement that he would impose a 25% tariff on iPhones manufactured outside the U.S.. The statement, made on Truth Social, rattled investors, sparking a broader market selloff.

The Nasdaq, Dow Jones, and S&P 500 futures also declined, reflecting concerns over trade policies, rising costs, and economic uncertainty.

1. Trump’s Tariff Threat & Market Reaction

Trump’s statement read:

“I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.”

Following the announcement:

• Apple’s stock dropped 2.76%, wiping billions off its market cap.
• Nasdaq futures fell 1.8%, while Dow Jones declined 1.2%.
• European automakers, including Mercedes-Benz and Volkswagen, also saw losses due to Trump’s 50% tariff warning on EU imports.

2. Why Did Apple Inc Stock Drop?

Apple Inc. stock decline was driven by multiple factors:

A. Supply Chain Disruptions

• Apple Inc. relies heavily on India and China for iPhone production.
• A 25% tariff would increase costs, forcing Apple to either absorb losses or raise prices.
• Foxconn’s $1.5 billion investment in India could be impacted if Apple shifts production back to the U.S..

B. Investor Uncertainty

• Wall Street analysts fear that Apple’s profit margins could shrink.
• Tech stocks, including Nvidia and Tesla, also saw declines due to broader market concerns.
• Moody’s credit downgrade added to investor anxiety.

C. Potential iPhone Price Hike

• If Apple Inc. absorbs the tariff, its profitability will decline.
• If Apple passes the cost to consumers, iPhone prices could rise to $3,500, making them unaffordable for many buyers.

3. Apple’s Response & India’s Expanding Role

Despite Trump’s pressure, Apple remains committed to India:

• Foxconn is expanding operations, with 30,000 new jobs in India.
• Apple plans to manufacture 25-30 million iPhones in India in 2025, doubling last year’s output.
• India’s Production-Linked Incentive (PLI) scheme supports Apple’s long-term growth strategy.

Apple’s CEO Tim Cook has not issued an official statement, but analysts believe Apple will continue diversifying its supply chain rather than shifting production to the U.S..

4. Future Outlook for Apple & Investors

A. Will Apple Inc. Move Production to the U.S.?

Experts argue that U.S.-based iPhone production is unrealistic:

• Infrastructure costs would exceed $50 billion.
• Manufacturing timelines would take 5-10 years to develop.
• Labor costs in the U.S. are significantly higher than in India and China.

B. Stock Market Predictions

• Apple’s stock may remain volatile as investors assess Trump’s trade policies.
• Nasdaq and Dow Jones could see further declines if tariff concerns escalate.
• Long-term investors may view this as a buying opportunity, expecting Apple to recover.

Conclusion

Apple’s 2.76% stock drop following Trump’s tariff threat highlights investor concerns over trade policies, supply chain disruptions, and rising costs. While Apple remains committed to India, Trump’s push for U.S.-based production could create long-term challenges.

Investors should monitor Apple’s next moves, including potential price hikes, supply chain shifts, and global trade negotiations.