A new conflict appears to be brewing between Apple and US President Donald Trump, who publicly warned the company that tariffs of at least 25% will be imposed on iPhones if production is not done on American soil.
" I have already informed Tim Cook of Apple that I expect all iPhones destined for the US to be manufactured within the United States and not in India or elsewhere ," Trump wrote on the platform Truth Social . " If this does not happen, Apple will have to pay a tariff of at least 25%. Thank you for your attention to this matter!! ".
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The statement comes just days after Donald Trump admitted he had “a little problem” with Apple’s CEO. That problem was related to reports that the company plans to move all iPhone production to India. The Financial Times revealed that Foxconn —Apple’s main manufacturing partner—is investing $1.5 billion in a new factory in Chennai, southern India.
Offshoring production is not a new strategy for Apple, which has been trying to reduce its reliance on China for years. The combination of the pandemic and worsening Sino-US relations has accelerated this shift to India and other Asian countries. While India is currently subject to a basic tariff of 10%, China faces tariffs of up to 30% — with the possibility of a further increase in August.
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It is worth noting that most Apple products, including iPhones, are currently exempt from the higher tariffs. However, the general uncertainty of the geopolitical landscape gives Apple sufficient reason to accelerate the geographical diversification of production. However, even this does not seem to be enough for Donald Trump, who wants to move production to the US.
Trump is trying to bolster his “America First” rhetoric by appealing to voters concerned about the deindustrialization of the United States and the offshoring of jobs. Apple, as an iconic American company, is an ideal “target” for such statements.
Apple has pledged to invest $500 billion in the US over the next four years, and Tim Cook himself has previously supported Trump (donating $1 million to his inauguration fund), but industry experts say the idea of a “Made in USA” iPhone remains unfeasible on a mass scale. After all, as Steve Jobs famously told Barack Obama in 2011: “ These jobs are never coming back .”
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The global iPhone supply chain is the result of decades of technology investment, skilled labor, and subcontractor ecosystems in Asia — primarily China and now India. Moving all production to the U.S. would mean huge costs, slow production, and much higher prices for consumers. That could ultimately hurt both Apple (and the economy).
Source: www.theverge.com
