Trump says will impose 25% tariff on Apple if it sells India-made iPhones in US

“I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United  States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S. Thank you for your attention to this matter,” Trump said in a social media post Friday.

Trump’s comment poses a challenge to Apple’s plans of selling only India-made iPhones in the US in the near term owing to higher tariffs imposed on China, where the company has its most significant production base. During an analysts’ call earlier this month, Cook had said that for the quarter ending June, the company was expecting a majority of the iPhones sold in the US to have India as their country of origin.

Apple did not respond to a request for comment.

Despite Trump’s earlier warning to Apple that it should focus on production in the US and refrain from expanding in India, earlier this week, Apple’s contract manufacturer Foxconn informed the London Stock Exchange it was investing $1.49 billion in one of its India units, Yuzhan Technologies (India) Pvt Ltd. The plant is expected to come up in Tamil Nadu, where Foxconn also has a major iPhone production base.

Last October, the Tamil Nadu government had cleared the Rs 13,180 crore project by Yuzhan Technology in Kancheepuram, about 80 km from Chennai. It is expected that Foxconn’s fresh investment in the country, as it intimated to the stock exchange, would go into this plant.

Currently, iPhones are primarily assembled in China, India and Vietnam, with Apple having plans to expand operations in India. Experts have said that moving production to the US would be impractical for Apple, given that the company has no manufacturing and supplier base in the country . “Supply chains don’t reorient themselves overnight. Companies that are as big as Apple make supply chain decisions after months and years of strategising. One stray comment which discourages them from their move is not going to change the fact that they want to double down on production in India,” a senior government official said.

Apple has identified India as a key market for iPhone production and a gradual base for its suppliers in a move away from China. The company currently produces nearly 15% of all iPhones in India, with plans to increase that to a quarter in the coming years. The company’s assembly operation in India has been a key success story of the government’s ‘Make in India’ push.

Apple was caught in the crosshairs of the retaliatory tariff action by Trump, where China was among the worst hit. While there have been some concessions along the way, such as the US administration exempting smartphones and computers from many of the levies, there is fear that the categories could see fresh tariffs in the future, something that Trump has hinted at. However, since then, the US and China have agreed to a trade deal.

Apple and its manufacturing partners have been the biggest beneficiaries of subsidies under the PLI scheme for smartphones. The Indian Express had earlier reported that, under the scheme, the government has disbursed close to $1 billion in the three years from 2022-23 to 2024-25, with the three contract manufacturers of Apple receiving cumulatively over 75 per cent of the amount.

Apple’s contract manufacturers, Foxconn, Tata Electronics and Pegatron (which was recently acquired by the Tatas), have received a total of almost Rs 6,600 crore over three years — 2022-23 and 2024-25.