Trump’s 25% Tariff Threat: Will Apple Be Forced to Manufacture iPhones in the U.S.?

U.S. President Donald Trump has reignited his push for American-made iPhones warning Apple that if it continues to manufacture iPhones in India, the company will face a 25% tariff on all iPhones sold in the U.S..

Trump’s demand comes as Apple shifts production away from China, with India emerging as a key manufacturing hub. However, Trump insists that Apple should prioritize U.S. production, arguing that outsourcing is no longer acceptable.

Trump’s Warning to Apple to Manufacture iPhones in India

Trump took to his Truth Social platform, stating:

“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.”

Trump’s remarks follow his recent conversation with Apple CEO Tim Cook, where he criticized Apple’s expanding investment in India.

The U.S. president has been vocal about his “America First” policy, which prioritizes domestic manufacturing. In his 2016 and 2020 campaigns, Trump repeatedly pressured U.S. tech giants, including Apple and Tesla, to shift production back to the U.S.

However, industry leaders argue that building iPhones in America is economically unfeasible, given the country’s lack of supply chain infrastructure for high-tech component manufacturing.

Apple’s Response & India’s Expanding Role in Global iPhone Production

Despite Trump’s pressure, Apple has reassured the Indian government that its plans to manufacture iPhones remain unchanged.

Apple’s expansion in India is strategic, following growing tensions with China and a global shift in production hubs.

1. India’s Rising Share in iPhone Production

Apple has significantly increased its reliance on India, with the country now accounting for a substantial percentage of global iPhone production.

• Foxconn’s $1.5 billion investment is strengthening its production capacity.
• Apple is on track to manufacture over 25 – 30 million iPhones in India in 2025, doubling output from previous years.
• 60-65% of iPhones may be manufactured in India by late 2025, reducing dependence on China.

2. India’s Strategic Importance for Apple

Apple’s expansion in India is driven by multiple factors:

• Diversification from China amid ongoing U.S.-China trade tensions.
• India’s thriving middle-class market, with iPhone sales growing by 40% year-over-year.
• Government incentives, including reduced tariffs and tax benefits.

3. Apple’s Long-Term Vision for India

• Local component sourcing – Apple is working with Indian suppliers to build a more self-sustaining manufacturing ecosystem.
• Retail expansion – Following the launch of Apple Stores in Mumbai and Delhi, more stores are expected to open by 2026.
• Software development investment – Apple has ramped up hiring for AI and software teams in India.

Despite Trump’s push for U.S.-based iPhone production, Apple views India as a critical manufacturing hub, ensuring cost efficiency, scalability, and long-term growth.

Economic & Political Implications

1. Tariff Concerns

• If Trump enforces a 25% tariff, iPhone prices in the U.S. could skyrocket to $3,500, making them unaffordable for many consumers.
• Apple’s stock price dropped 2.5% following Trump’s announcement.

2. Supply Chain Challenges

• Experts argue that U.S.-based iPhone production is unrealistic, as it would require billions in infrastructure investment and years to develop.
• Apple relies on a global network of suppliers, making a full transition to U.S. manufacturing highly complex.

3. India’s Growing Role

• Apple’s expansion in India aligns with the country’s Production-Linked Incentive (PLI) scheme, which encourages high-tech manufacturing.
• India’s friendly trade relations with the U.S. make it a strategic alternative to China.

Conclusion

Trump’s push for U.S.-based iPhone production clashes with Apple’s long-term strategy of diversifying its supply chain. While Trump insists that Apple should manufacture in America, Cook remains focused on India’s growing role in Apple’s global operations.

Trump’s 25% tariff threat could force Apple to reevaluate its production strategies, but shifting iPhone manufacturing to the U.S. remains economically unviable. With India offering government incentives, skilled labor, and a growing market, Apple is unlikely to reverse its expansion plans in the country.

As global trade policies evolve, the future of Apple’s supply chain strategy will depend on political developments, economic factors, and U.S.-India relations.