Trump Pressures Apple to Manufacture iPhones in the U.S. Amid Trade Tensions
The president's insistence could lead to significant price increases for consumers as analysts deem the request impractical.
New York - President Donald Trump directed Apple to relocate the production of iPhones to the United States, threatening a tariff of 'at least 25%' on devices imported from abroad.
This ultimatum has raised concerns among analysts who believe that fully shifting production stateside is unrealistic in the short term.
Bank of America analysts noted that while it may be possible to assemble final products in the U.S., transitioning the entire supply chain would be a far more complex endeavor, likely taking years to accomplish, if it could be achieved at all.
They estimated that relocating production could increase iPhone prices in the U.S. by approximately 25%.
Wedbush Securities analysts projected that under such circumstances, the cost of an iPhone could rise to around $3,500 per unit, compared to the current retail price of $799 for the iPhone 16. They remarked that this scenario is 'unrealistic,' emphasizing that concentrating production in the United States could take between five to ten years and deemed the proposal 'a fairy tale, infeasible.'
After Trump's announcement, Apple's stock price experienced an initial drop of nearly 4% during opening trades on the New York Stock Exchange, stabilizing to a 2.5% decline as the market reacted to the news.
In a related statement, Trump extended his warning to all smartphone manufacturers operating outside the U.S., including competitors like Samsung, stating, 'It would also apply to Samsung and anyone else making that product; otherwise, it wouldn’t be fair.' Trump elaborated that new tariffs would likely come into effect by the end of June.
In a statement on Truth Social, Trump conveyed to Tim Cook, Apple's CEO, that he expected iPhones sold in the United States to be manufactured domestically, rather than in India or elsewhere.
He warned that failure to comply would result in the imposition of the proposed tariffs.
Response from Apple was not immediate regarding the president’s demands.
Traditionally, Apple has assembled the majority of its iPhones in China, through its main contractors, Foxconn and Pegatron.
In light of growing tensions between the U.S. and China, Apple has gradually shifted part of its production to India since 2018, during Trump’s initial term.
Apple has accelerated its production efforts in India over the past year, as evidenced by Cook's remarks in May indicating that 'most of the iPhones sold in the United States' during the current quarter were expected to be sourced from India.
This shift has allowed Apple to navigate around the 145% tariffs applied to products imported from China.
The U.S. and China had previously agreed to a 90-day truce in their trade war while negotiations continued, leading to a reduction of tariffs on imported goods from China from 145% to 30%.
Tata Electronics, a subsidiary of the Tata industrial conglomerate, announced the commencement of assembly for the iPhone 16 in Hosur, southern India.
Additionally, Foxconn is preparing to launch a new plant in Devanahalli, also in southern India, which is expected to create approximately 30,000 jobs.
This ultimatum has raised concerns among analysts who believe that fully shifting production stateside is unrealistic in the short term.
Bank of America analysts noted that while it may be possible to assemble final products in the U.S., transitioning the entire supply chain would be a far more complex endeavor, likely taking years to accomplish, if it could be achieved at all.
They estimated that relocating production could increase iPhone prices in the U.S. by approximately 25%.
Wedbush Securities analysts projected that under such circumstances, the cost of an iPhone could rise to around $3,500 per unit, compared to the current retail price of $799 for the iPhone 16. They remarked that this scenario is 'unrealistic,' emphasizing that concentrating production in the United States could take between five to ten years and deemed the proposal 'a fairy tale, infeasible.'
After Trump's announcement, Apple's stock price experienced an initial drop of nearly 4% during opening trades on the New York Stock Exchange, stabilizing to a 2.5% decline as the market reacted to the news.
In a related statement, Trump extended his warning to all smartphone manufacturers operating outside the U.S., including competitors like Samsung, stating, 'It would also apply to Samsung and anyone else making that product; otherwise, it wouldn’t be fair.' Trump elaborated that new tariffs would likely come into effect by the end of June.
In a statement on Truth Social, Trump conveyed to Tim Cook, Apple's CEO, that he expected iPhones sold in the United States to be manufactured domestically, rather than in India or elsewhere.
He warned that failure to comply would result in the imposition of the proposed tariffs.
Response from Apple was not immediate regarding the president’s demands.
Traditionally, Apple has assembled the majority of its iPhones in China, through its main contractors, Foxconn and Pegatron.
In light of growing tensions between the U.S. and China, Apple has gradually shifted part of its production to India since 2018, during Trump’s initial term.
Apple has accelerated its production efforts in India over the past year, as evidenced by Cook's remarks in May indicating that 'most of the iPhones sold in the United States' during the current quarter were expected to be sourced from India.
This shift has allowed Apple to navigate around the 145% tariffs applied to products imported from China.
The U.S. and China had previously agreed to a 90-day truce in their trade war while negotiations continued, leading to a reduction of tariffs on imported goods from China from 145% to 30%.
Tata Electronics, a subsidiary of the Tata industrial conglomerate, announced the commencement of assembly for the iPhone 16 in Hosur, southern India.
Additionally, Foxconn is preparing to launch a new plant in Devanahalli, also in southern India, which is expected to create approximately 30,000 jobs.
