Trump threatens 25% tariff on Apple if iPhones made in India are sold in US

In a bold and unexpected move, US President Donald Trump has declared that Apple will face a steep 25% tariff if it sells iPhones made in India in the United States. The announcement throws a wrench into Apple’s ambitious plans to shift the majority of its iPhone production to India, a strategy driven by rising tariffs and geopolitical tensions surrounding its Chinese manufacturing base.

“I have long ago informed Tim Cook of Apple that I expect their iPhones sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump said in a May 23 social media post.

“If that is not the case, a tariff of at least 25% must be paid by Apple to the US. Thank you for your attention to this matter.”

This demand directly conflicts with Apple’s recent statements. Earlier this month, CEO Tim Cook revealed that the majority of iPhones sold in the US would soon be made in India. The shift comes as the company grapples with escalating tariffs on Chinese goods and seeks to diversify its supply chain amid ongoing US-China trade tensions.

Trump’s latest ultimatum follows his earlier warning to Cook, where he opposed Apple’s expansion of manufacturing in India, unless it was strictly for the Indian market. The timing is critical as India and the US are currently engaged in trade negotiations, underscoring the complex geopolitical backdrop influencing global manufacturing decisions.

Industry experts caution that relocating Apple’s production to the US is a monumental challenge. The company lacks a manufacturing ecosystem and supplier base comparable to China or India, making an abrupt shift impractical. A senior government official remarked, “Supply chains don’t reorient themselves overnight. Companies as large as Apple make these decisions after years of strategizing. One stray comment won’t derail their move to deepen production in India.”

Despite Trump’s warnings, Apple’s manufacturing partner Foxconn recently announced a $1.49 billion investment in an Indian plant in Tamil Nadu. This project, cleared by the Tamil Nadu government last October, aims to boost Apple’s India production capabilities further.

India has emerged as a pivotal hub for Apple, accounting for roughly 15% of its global iPhone output, with ambitions to increase that to 25% in coming years. The company’s success in India also reflects the broader ‘Make in India’ initiative, with Apple’s contract manufacturers — Foxconn, Tata Electronics, and Pegatron — being significant beneficiaries of government production-linked incentives totaling nearly $1 billion over three years.

However, the specter of tariffs looms large. Apple was among the key casualties of Trump’s retaliatory tariffs targeting China, with fears of fresh levies hanging over smartphones and computers despite some exemptions. While the US and China have since reached a trade deal, Trump’s latest pronouncement signals ongoing uncertainty for Apple’s global manufacturing strategy.

As the battle over tariffs intensifies, Apple finds itself at a crossroads: navigate the complex geopolitical landscape or risk significant cost hikes that could disrupt its supply chain and impact its flagship product’s availability and pricing in its largest market.