President Donald Trump has warned Apple that it could face a crippling 25% tariff on all iPhones sold in the United States — unless it moves production to American soil.
The president issued the threat Friday via his Truth Social account, making it clear he expects Apple’s flagship product to be assembled domestically rather than overseas.
“I have long ago informed Tim Cook of Apple that I expect their iPhone’s 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. “If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S. Thank your for your attention to this matter!”
The statement comes just days after Financial Times reported that Apple supplier Foxconn is developing a $1.5 billion plant in southern India’s Chennai to produce iPhone displays. This is part of Apple’s broader strategy to diversify its production base away from China, spurred by both the COVID-era supply chain disruptions and rising U.S.-China trade tensions.
But Trump, who has long criticized Apple’s overseas manufacturing model, is now taking aim at the company’s pivot to India and Southeast Asia.
Apple Stock Dips as Markets React
Trump’s post triggered immediate tremors in financial markets. Apple shares fell 3.6% in premarket trading Friday, dragging down the S&P 500 index by 1.5%. European indices also dropped after Trump issued a separate threat against the European Union, proposing a 50% tariff on EU goods starting June 1. He accused the bloc of exploiting the United States through “trade barriers and corporate penalties,” calling the $250 billion trade deficit “totally unacceptable.”
Earlier this month, Trump hinted at his growing frustration with Apple CEO Tim Cook. “I had a little problem with Tim Cook yesterday,” Trump told an audience. “I said to him, ‘my friend, I treated you very good. You’re coming here with $500 billion, but now I hear you’re building all over India.’ I don’t want you building in India.”
Despite Apple’s commitment to invest $500 billion in the U.S. over the next four years, and Cook’s personal $1 million donation to Trump’s 2017 inauguration, the president’s patience appears to be wearing thin.
Why Apple Can’t Just Build iPhones in the U.S.
Trump’s demand confronts Apple with a dilemma that analysts say has no easy solution. Building iPhones in America is not only logistically difficult but also economically unrealistic.
Apple’s reliance on Asia is deeply rooted in decades of global manufacturing evolution. Assembling a single iPhone involves hundreds of parts from dozens of countries, and relies on an ultra-efficient supply chain that has been perfected over time, particularly in Chinese cities like Shenzhen and Zhengzhou.
Analysts estimate that shifting production to the U.S. could cause iPhone prices to spike by 50% or more — raising the retail cost to somewhere between $1,500 and $3,500, depending on the model. That’s a steep price for consumers and would threaten Apple’s competitive edge in the global smartphone market.
“The pressure from Trump on Apple to build iPhone production in the US as we have discussed this would result in an iPhone price point that is a non-starter for Cupertino and translate into iPhone prices of ~$3,500 if it was made in the US which is not realistic in our view,” said Dan Ives, analyst at Wedbush Securities.
In manufacturing circles, Shenzhen is often referred to as having a “manufacturing brain trust” — a dense, interconnected cluster of engineers, skilled workers, and suppliers that allows production to scale up rapidly and adapt in real-time.
Cook had in the past, attributed Apple’s decision to manufacture in China to a vast supply of highly skilled vocational talent.
“China has moved into very advanced manufacturing, so you find in China the intersection of craftsman kind of skill, and sophisticated robotics and the computer science world. That intersection, which is very rare to find anywhere, that kind of skill, is very important to our business because of the precision and quality level that we like,” Cook said at the Fortune Global Forum in Guangzhou in 2017.
“The thing that most people focus on if they’re a foreigner coming to China is the size of the market, and obviously it’s the biggest market in the world in so many areas. But for us, the number one attraction is the quality of the people. The reason is because of the skill, and the quantity of skill in one location and the type of skill it is. And China has an abundance of skilled labor unseen elsewhere, says Cook,” added.
He explained that in the U.S., you could have a meeting of tooling engineers and not fill the room, while in China, you could fill multiple football fields.
That infrastructure simply does not exist in the U.S. Even when Apple has tried, the results have been limited. Its Mac Pro, assembled in Texas, is one of the few Apple products made in the U.S., but even that machine uses components sourced from around the globe.
From Trump’s ‘America First’ Agenda
The timing of Trump’s outburst is no coincidence. His administration has continued its hard line on trade imbalances, and Friday’s threats suggest tariffs will remain a key feature of his economic policy. India currently faces a baseline 10% tariff on goods imported to the U.S., while China’s rate stands at 30% — a figure that could rise again in August when a temporary reduction expires.
Until now, many Apple products, including iPhones, have enjoyed exemptions from the more punitive tariff tiers. But with Trump threatening to revoke those protections, Apple may be forced to either absorb the cost or pass it on to American consumers.
And the problem isn’t isolated to China or India. Trump’s blanket approach to trade means Apple’s other key production countries — Vietnam, Malaysia, Thailand, and even Ireland — could face similar tariff hikes, further narrowing the company’s options.
Apple at a Crossroads
This means the path forward is unclear for Apple. Moving large-scale iPhone production to the U.S. would require massive investments, workforce development, and a total reengineering of its supply chain. Meanwhile, complying with Trump’s 25% tariff without relocating would devastate its profit margins or alienate customers with soaring prices.
Though Apple has not responded publicly to the tariff threat, industry insiders say the company is unlikely to reverse its global manufacturing strategy overnight — especially when it is only now beginning to scale meaningful production outside of China.
Trump’s message, however, signals a hardening of trade policy that could force Apple — and potentially other U.S. tech giants — into a costly recalibration. The president’s stance also complicates Apple’s broader ambitions, including future product launches and its efforts to insulate itself from geopolitical shocks.
