Trump Threatens 25% Tariff on Apple Unless iPhones Are Made In The US

President Donald Trump has threatened to impose 25% tariffs on Apple by June unless the tech giant keeps its iPhone manufacturing domestic.

Following the recently heated US-China trade war, CEO Tim Cook announced moving more operations from China to India to forfend against the enormous tariff effects on products from China to the US.

However, Cook's strategic pivot to cushion Apple from escalating tariffs appears to have drawn political fire, with the US President sharply criticising the tech giant for manufacturing the majority of its iPhones in India. 'He said he's going to India to build plants. I said, that's okay to go to India, but you're not going to sell into here without tariffs, and that's the way it is,' Trump told reporters.

The rebuke came on the heels of Tim Cook's recent earnings call, where he outlined efforts to shift production away from China amid rising trade tensions.

Trump Vs Apple

Trump voiced his criticism in a social media post on 23 May, denouncing Apple's continued dependence on offshore manufacturing.

According to Cook, during a meeting on 1 May, tariffs are projected to increase Apple's costs by $900 million during the current quarter.

Cook also noted that the tech giant is shifting production to reduce its exposure to higher tariffs on goods manufactured in China. He added that Vietnam would soon serve as the 'country of origin' for 'almost all' iPads, Mac computers, Apple Watches and AirPods.

Apple Faces Market Fallout and Rising Investor Concerns

So far, Apple has shed around $70 billion in market value following the announcement, with shares dropping by more than 3%, leaving the company's valuation at just shy of $3 trillion. This decline underscores growing investor concerns over escalating trade tensions and the complex challenges Apple faces in reconfiguring its global supply chain amid geopolitical uncertainties.

Speaking further on the tariff to Whitehouse journalists in the Oval Office, Trump clarified that the tariff imposition would include other smartphone companies producing devices outside the United States. He said: 'It would be more. It would be also Samsung and anybody that makes that product, otherwise it wouldn't be fair," he said. "When they build their plant here, there is no tariff.'

Trump has made it central to his fiscal policy to impose tariffs on imports in an effort to raise billions of dollars from the initiative while encouraging domestic manufacturing.

Experts Warn US-Made iPhones Could Triple in Price

Nevertheless, industry experts warn that the move might easily mean hikes in product prices for the devices, considering the limited supply of skilled workforce, high labour costs, and lack of existing facilities, among other factors impacting manufacturing costs in the US.

According to analysts at Wedbush Securities, iPhones manufactured in the US could cost around $3,500, compared to the current $1,200 price point.

In February, Apple reported investing $500 billion in the US to create 20,000 jobs within the next four years. However, with the current tariff imposition and the potential cost and operational implications that will follow, how that might turn out is yet to be seen.