Trump threatens to hit Apple with 25% tariff on iPhones made outside U.S.

President Trump has once again made headlines with his threat to impose tariffs on Apple if the tech giant does not shift some of its iPhone production to the United States. The president took to his Truth Social social media platform to express his expectations for Apple to manufacture iPhones exclusively in the U.S., warning of a 25% tariff if they fail to comply.

In a separate post, Trump also targeted the European Union, proposing a hefty 50% tariff on the group of countries due to stalled negotiations. The president emphasized that there would be no tariffs if products were built or manufactured in the United States, setting a deadline of June 1, 2025, for the proposed tariff to take effect.

Despite Mr. Trump’s previous tariffs, Apple had been exempt from high-tech product tariffs, including the iPhone, which is predominantly manufactured in China. However, Apple shares took a hit in pre-market trading following the president’s latest threats, signaling potential challenges for the tech giant.

The timing of Trump’s threats coincides with Apple’s supplier Foxconn’s announcement of a $1.5 billion investment in its Indian operations. While Apple continues to produce the majority of iPhones in China, the company has been expanding its manufacturing presence in India to mitigate the impact of Chinese tariffs.

During a recent earnings call, Apple CEO Tim Cook revealed that over 50% of iPhones intended for the U.S. market are now being produced in India. Cook also hinted at a significant increase in iPhone assembly production in India by the fall, indicating a strategic shift away from Chinese manufacturing.

In a bid to bolster its U.S. manufacturing footprint, Apple announced a $500 million investment in American manufacturing over the next four years. This move, lauded by the Trump administration, includes the construction of a new factory in Houston, Texas, to produce servers locally.

While Apple’s commitment to U.S. manufacturing is commendable, analysts suggest that shifting iPhone production entirely to the U.S. would be impractical and costly. Estimates indicate that manufacturing iPhones domestically could inflate the device’s price by hundreds or even thousands of dollars, potentially reaching as high as $3,500 per device.

Despite the challenges posed by Trump’s tariff threats and the complexities of reshoring production, Apple remains focused on diversifying its manufacturing base and investing in American innovation. While the prospect of U.S.-made iPhones may be a distant one, Apple’s commitment to expanding its domestic operations underscores its dedication to supporting American manufacturing and innovation.