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Trump threatens Apple with 25% tariffs over foreign iPhone production; shares fall

by admin May 24, 2025
May 24, 2025
Trump threatens Apple with 25% tariffs over foreign iPhone production; shares fall

Apple’s decision to expand its manufacturing footprint in India has triggered a sharp response from US President Donald Trump, who warned on Friday that iPhones sold in the United States must be made domestically—or face heavy tariffs.

The warning marks a new escalation in Trump’s global tariff strategy, directly targeting one of the world’s most valuable companies.

“I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump posted on Truth Social.

“If that is not the case, a tariff of at least 25% must be paid by Apple to the U.S.”

The move marks Trump’s first direct trade threat against a single company, setting a precedent for potential future action against other multinationals who rely heavily on overseas production.

Apple shares fell more than 3% in premarket trading after the post, dragging down broader market sentiment.

Dow Jones Industrial Average futures dropped by 112 points, or 0.3%, while Nasdaq 100 and S&P 500 futures both declined by 0.4% and 0.3%, respectively.

Source: Truth Social

Trump’s warning follows report about Foxconn’s $1.5bn plant in India

The president’s statement comes on the heels of reports about Apple’s key supplier, Foxconn’s plans to invest $1.5 billion in a new component plant near Chennai, India, further entrenching the country’s position in Apple’s global supply chain.

According to a Financial Times report, the plant will assemble iPhone display modules, which play a vital role in the touchscreen interface and visual quality of the device.

Two Indian government officials told FT that the facility, located in Tamil Nadu’s Oragadam industrial region, has already received clearance from local authorities.

It is expected to create around 14,000 jobs and become one of the largest electronics-sector investments in the country.

Foxconn disclosed the investment via a filing on the London Stock Exchange this week, noting that the funds will be routed through its Indian subsidiary, Yuzhan Technology India.

Currently, Apple manufactures around 85% of its iPhones in China, with India accounting for roughly 15%.

The company has been slowly increasing its Indian production share, partly to diversify its supply chain away from China amid rising geopolitical risks and to leverage India’s more favourable trade ties with the United States.

Escalation of frustration

Trump’s threat follows a more measured statement he made last week on the same issue

At an event in Qatar last week, Trump revealed that he had directly confronted Apple CEO Tim Cook about the company’s growing operations in India, despite its pledge to invest $500 billion in the United States.

“I had a little problem with Tim Cook yesterday,” Trump said. “I told him: ‘Tim, you’re my friend. You’re coming here with $500 billion, but now you’re building all over India. I don’t want you building in India.”

He accused Apple of taking advantage of preferential treatment in the US while concentrating its manufacturing overseas, especially in China.

“We’ve treated you really good,” he said. “Now you got to build for us.”

The high costs of Apple’s US manufacturing

Despite political pressure, shifting iPhone assembly to the United States remains economically challenging.

Industry analysts estimate that relocating production would cause labour costs to skyrocket—from $290 per month per worker in India to about $2,900 under US wage laws.

This would increase the cost of assembling each device from around $30 to $390.

Such a move could slash Apple’s profit per iPhone from $450 to just $60 unless the company raises its prices.

Some estimates suggest that building the devices entirely in the US could push the retail price to nearly $3,000—three times the current price point.

This cost disparity has long been a key reason for Apple’s international production strategy.

While India offers relatively lower costs and improving infrastructure, bringing manufacturing stateside would be financially unsustainable without a significant increase in retail prices or a dramatic reduction in margins.

The post Trump threatens Apple with 25% tariffs over foreign iPhone production; shares fall appeared first on Invezz

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