The once solid relationship between President Donald Trump and Apple CEO Tim Cook is showing clear signs of strain over the issue of iPhone manufacturing locations. Trump recently expressed frustration with Cook and Apple’s plan to source most iPhones sold in the U.S. from factories in India rather than China. This plan, confirmed by Cook during recent earnings discussions, has sparked Trump’s ire, culminating in a social media threat to impose a 25% tariff on iPhones.
Trump has been vocal about his desire for Apple to produce iPhones destined for the U.S. market domestically, criticizing the company’s move to India. On social media, he emphasized that he expects iPhones sold in the U.S. to be manufactured within the country, explicitly rejecting production in India or elsewhere. This public call for U.S.-based manufacturing has heightened tensions between the tech giant and the former president.
Industry analysts have weighed in, largely dismissing the feasibility of bringing iPhone production back to the United States. Apple supply chain expert Ming-Chi Kuo argued that absorbing a 25% tariff would be more financially viable for Apple than relocating assembly lines back to the U.S. Given the high costs of labor and infrastructure, Apple would likely suffer a significant hit to profitability if forced to manufacture domestically.
Supporting this view, UBS analyst David Vogt described the tariff threat as a “jarring headline” but downplayed its potential impact as only a modest challenge to Apple’s earnings. He projected that such tariffs could reduce annual earnings by 51 cents per share, a manageable decline compared to previous tariff pressures.
Many experts have long considered the idea of a U.S.-made iPhone either impossible or prohibitively expensive. Estimates suggest that if iPhones were assembled in the U.S., retail prices could soar to between $1,500 and $3,500 per device, reflecting increased labor costs and logistical hurdles. Building out the necessary supply chains, factories, and equipment for domestic production would require years of investment and face complications including tariffs on imported components.
Apple began manufacturing iPhones in India in 2017, and only recently has India’s manufacturing ecosystem developed the capacity to produce Apple’s latest models. Wedbush analyst Dan Ives dismissed the notion of U.S.-based production as a “fairy tale” and emphasized the significant obstacles involved.
Despite these challenges, uncertainty remains about how Trump’s tariff threat might ultimately unfold. Apple could seek to negotiate a deal with the administration, pursue legal challenges, or benefit from existing tariff waivers. Currently, most of Apple’s key products are exempt from tariffs following a waiver granted by the Trump administration in April, but it is unclear what will happen after June.
Wells Fargo analyst Aaron Rakers expressed skepticism that the proposed 25% tariff would be implemented. He suggested Apple might protect its gross margins by increasing iPhone prices in the U.S. by $100 to $300 per unit if tariffs were imposed. It also remains unclear how tariffs would specifically target iPhones made in India, though there is speculation the administration could impose tariffs on imports from India.
Apple’s operations in India continue to grow, with Foxconn, Apple’s main assembler, reportedly investing $1.5 billion in a new factory in India that could expand iPhone production. Apple declined to comment on Trump’s recent statements, leaving the dispute unresolved for now as tensions mount over the future of iPhone manufacturing and trade policy.
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