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Tariffs

Trump Threatens Apple with 25% Tariff on iPhones

Strategic Insights

— 2 min read

President Donald Trump has escalated his trade dispute with Apple, threatening the US technology company with a 25 per cent tariff on iPhones unless they are manufactured in the US. This comes as Apple plans to source its iPhones from Indian factories, which would supply the "majority" of devices sold in the US in the coming months. The move has significant implications for the US technology industry, with Apple's share price taking a hit following the announcement.

Key Takeaways:

  • Apple plans to source iPhones from Indian factories, which will supply the "majority" of devices sold in the US in the coming months.
  • President Trump has threatened Apple with a 25 per cent tariff on iPhones unless they are manufactured in the US.
  • Foxconn, a key Apple supplier, is investing $1.5bn to expand iPhone production in India.
  • Apple sells over 60 million iPhones in the US each year, with the company planning to source all devices from India by the end of next year.
  • The US and India are negotiating a bilateral trade agreement to avoid a 26 per cent tariff on Indian goods.
  • Prime Minister Narendra Modi's government has offered investors billions of dollars' worth of production-linked incentives to encourage electronics production in India.
  • India contributed 18 per cent of global iPhone production last year and is expected to rise to 32 per cent this year, according to Counterpoint Research.
  • Apple has pledged to spend hundreds of billions of dollars in the US over the next four years, including buying chips and AI servers made in America.
  • The challenges of replicating Apple's Asian supply chain and production facilities in the US are significant, with analysts estimating costs will run into tens of billions of dollars and take many years to complete.

Statistics:

  • Apple sells over 60 million iPhones in the US each year.
  • Foxconn is investing $1.5bn to expand iPhone production in India.
  • Apple's share price declined 2.7 per cent in afternoon trading in New York yesterday.
  • The company's stock lost over $300bn in a single day last month after Trump threatened huge new tariffs on dozens of countries, including all of Apple's biggest manufacturing hubs.
  • India contributed 18 per cent of global iPhone production last year and is expected to rise to 32 per cent this year, according to Counterpoint Research.

Sources:

  • The article in The Financial Times, previously reported
  • The article in Foxconn, reported by Foxconn
  • "A 25% tariff on Apple iPhones" by TIM BRADSHAW, published in London John REED
  • "Apple to invest $1.5 billion in Indian display module facility" by The Financial Times
  • "India to contribute 32% of global iPhone production this year" by Counterpoint Research

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