The Trump administration’s years-long obsession with forcing American manufacturing to return home, especially its push for a U.S.-made iPhone, is colliding head-on with the hard realities of international trade and global supply chains.
That dream received a symbolic boost this month as President Trump ratcheted up tariffs on Chinese imports, pushing levies above the 100% mark. But just as swiftly, China has responded with its own counterpunch—slapping steep new tariffs on American goods, escalating the trade war into dangerous territory for both countries and the global economy.
According to China’s Office of the Tariff Commission of the State Council, tariffs on U.S. goods will surge to 84%, up from 34%, effective April 10.
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The announcement, translated and released Wednesday, comes a day after the U.S. tariff hike took effect, raising import taxes on Chinese goods to 104% following an additional 50% increase ordered by Trump in response to Beijing’s initial retaliatory move on April 2.
China’s foreign ministry over the weekend slammed the Trump administration’s latest tariffs.
“By taking such action, the United States defies the fundamental laws of economics? and market principles, disregards? the balanced outcomes achieved through multilateral trade negotiations, ignores the fact that the U.S. has long benefited?substantially from international trade, and weaponizes tariffs to exert maximum pressure for selfish interests,” it said.
The tit-for-tat escalation is not only threatening to choke trade between two of the world’s biggest economies, but it’s also throwing a wrench into the Trump administration’s push to bring high-tech manufacturing, including the iPhone, back to American soil. As the White House dials up its protectionist policies, Apple is accelerating a quiet exit from China—not to the United States, but to India, where the cost and scale of production still make economic sense.
Still, Trump continues to tout the idea of Apple manufacturing iPhones in the U.S. as a core piece of his “America First” economic platform. Speaking at a rally earlier this week, Trump said: “We’re bringing it all back. Apple, too. We’re not going to rely on China anymore.”
The administration’s narrative has been amplified by aides like Press Secretary Karoline Leavitt, who cited Apple’s $500 billion domestic investment pledge as proof that homegrown iPhone production is within reach.
But industry experts warn that manufacturing iPhones in the United States, far from being a patriotic triumph, would result in disastrous economic consequences for Apple and its customers. Not only would iPhones become dramatically more expensive—possibly over $2,000 apiece according to some analyses—but the U.S. lacks the industrial infrastructure and labor ecosystem required to match the efficiency and scale of Apple’s Chinese operations.
Apple, recognizing that the U.S.–China trade war is unlikely to ease soon, has been quietly shifting more of its supply chain to India. With labor and production costs second only to China, India offers a practical alternative for Apple, which has already begun assembling new iPhone models in the country through contract manufacturers like Foxconn and Pegatron. Analysts say Apple aims to produce as much as 25% of its global iPhone supply in India by 2026.
The economic shockwaves of the escalating trade war are already being felt. The Office of the U.S. Trade Representative noted that the U.S. exported $143.5 billion worth of goods to China in 2024 while importing $438.9 billion—a massive trade imbalance that Trump has long vowed to correct. Yet instead of narrowing the gap, the tariff war appears to be deepening economic uncertainty.
Global markets have not taken kindly to the latest blows. On Tuesday, the S&P 500 slid to its lowest level in over a year, down nearly 20% from its peak and officially entering bear market territory. In Asia, South Korea’s Kospi Index followed suit, while stocks in Shanghai and Hong Kong have plunged since the U.S. unveiled its April 2 tariff offensive.
U.S. Treasury Secretary Scott Bessent, in an interview with Fox Business, remained defiant.
“It’s unfortunate that the Chinese don’t want to negotiate, because they are the worst offenders in the international trading system,” he said. “They have the most imbalanced economy in the history of the modern world. This escalation is a loser for them.”
But for many U.S. industries, especially agriculture and manufacturing, the pain is already tangible. China’s tariffs are expected to hit U.S. farmers and exporters hard, many of whom rely heavily on the Chinese market for sales of soybeans, pork, and machinery. And for companies like Apple, the trade war is further complicating already strained global logistics.
The Trump administration’s earlier tariffs—imposed in part under the banner of stopping fentanyl inflows—had already included countries like Canada and Mexico, creating frictions with even longstanding U.S. allies. But with China now taking an unyielding stance and global markets in freefall, the administration’s economic nationalism is being tested like never before.