Topline
President Donald Trump on Friday threatened to hit Apple with a 25% tariff unless the company starts manufacturing iPhones in the U.S., just days after he criticized the company for its reported plans to move its smartphone production from China to India in a bid to beat tariffs.
File Photo: President Donald Trump said he warned Apple CEO Tim Cook that he expects iPhones sold in … More the U.S. to be manufactured domestically.
Key Facts
In a post on his Truth Social platform, Trump said he had “long ago informed” Apple CEO Tim Cook that he expects iPhones sold in the U.S. to be manufactured domestically, “not [in] India, or anyplace else.”
The president said if this were not the case, Apple would be forced to pay a tariff of at least 25% to the U.S.
Apple’s shares tanked more than 3.3% to $194.7 in premarket trading after Trump’s announcement.
In a separate post, Trump attacked the European Union, saying the bloc was “formed for the primary purpose of taking advantage of the United States on TRADE,” and said he will implement a “straight 50% Tariff” on all goods imported from the bloc.
What Has Trump Said About Apple Making Iphones Abroad?
Speaking at an event in Qatar last week during his Middle East tour, Trump said he had spoken with Cook and told him, “My friend, I treated you very good…but now I hear you’re building all over India…I don’t want you building in India.” The president acknowledged Apple’s plan to invest $500 billion in the U.S. but added, “India can take care of themselves, they are doing very well.” The president claimed that Cook told him Apple would be “upping their production in the United States,” although it’s unclear what this production would entail.
What Do We Know About Apple’s Iphone Manufacturing Plans In India?
Trump’s singling out of India is likely a response to recent reports about Apple’s plans to scale up iPhone production in the country. Recent trade tensions between Washington and Beijing have boosted the Indian manufacturing sector as companies attempt to diversify away from China. The most prominent example of this has been Apple’s efforts to shore up iPhone production in India in a bid to avoid the steep U.S. tariffs placed on China that are now paused. According to reports from several outlets last month, Apple is planning to make most U.S.-bound iPhones in its Indian factories by the end of next year. In the 12 months ending March 2025, one in five Apple iPhones were made in India.
What Did Trump Say About Tariffs On The Eu?
In his post about the EU, Trump accused the bloc of being “very difficult to deal with.” He alleged that the block’s “trade barriers,” value-added taxes, corporate penalties, and “unfair and unjustified lawsuits against Americans Companies,” among other things, have created a trade deficit of “more than $250,000,000 a year, a number which is totally unacceptable.” The president likely meant to say $250 billion instead of $250 million, since the office of the U.S Trade Representative pegs that number at $235.6 billion in 2024. Trump also claimed that trade negotiations with the EU were “going nowhere,” and therefore, he was recommending a 50% tariff starting June 1. When Trump unveiled his sweeping list of so-called “reciprocal tariffs” last month, the EU was hit with a 20% rate before a 90-day pause went into effect. The EU, which was planning a set of retaliatory levies, halted its plans after the U.S. pause went into effect.
Apple And U.s. Stocks Slide After Trump Tariff Threat
Trump’s tariff threats against Apple and the EU soured market sentiment, with the U.S. stock index sliding sharply as markets opened. Apple shares were down 2.42% to $196.48, while benchmark S&P 500 Futures opened around 1% down at 5,785 points. The Dow Jones fell 0.86% to 41,499 points while the tech-heavy Nasdaq Futures was the worst hit, as it fell 1.22% to 18,695.65 points. In the EU, the pan-European STOXX Europe 50 was down 1.71% in afternoon trading, while Germany’s DAX index and France’s CAC 40 index were down 2.1% and 2.3% respectively.
Tangent
In a note on Friday, Wedbush analyst Dan Ives dismissed Trump’s push to build iPhone in the U.S. as “a fairy tale that is not feasible.” Ives’ note said: “we see no chance that iPhone production starts to happen in the US in the near-term given the upside down cost model and Herculean-like supply chain logistics needed for such an initiative.” He also noted that made in U.S. iPhones are a non-starter because it would translate into prices around $3,500, “which is not realistic.” He also noted that moving iPhone production to the U.S. could take 5-10 years.
Further Reading
Trump Says He ‘Doesn’t Want’ Apple To Expand Manufacturing In India (Forbes)
