Apple CEO Tim Cook has spent years working to reduce the company’s dependence on China, shifting iPhone production to countries like India and Vietnam—a strategy that began during Donald Trump’s first term as president. But that approach may now be facing a familiar challenge: Trump himself.
Apple’s stock took a hit on Friday, wiping out over $100 billion in market capitalization, after Trump declared the company must pay a 25% tariff if its iPhones aren’t made in the United States.
The warning highlights the limits of Apple’s ongoing efforts to minimize exposure to geopolitical risks. Although around 85% of iPhones are still produced in China, Apple has significantly expanded its operations in India and Vietnam to diversify its supply chain.
India has become a major hub in that diversification effort. In March, Foxconn and Tata—two of Apple’s key suppliers—airlifted a record $2 billion worth of iPhones to the U.S., anticipating tariff-related announcements. That move came just before Trump’s so-called Liberation Day declaration.
While the U.S. has eased duties on imports from most countries, China continues to face a 30% tariff, compared to a 10% levy for others.
Apple’s sourcing model is undergoing a major transformation.
“For the June quarter, we do expect the majority of iPhones sold in the US will have India as their country of origin and Vietnam to be the country of origin for almost all iPad, Mac, Apple Watch, and AirPods products also sold in the US,” Cook stated during Apple’s most recent earnings call. “China would continue to be the country of origin for the vast majority of total product sales outside the US.”
to shield the company from Trump’s tariff threats.
“We are bullish on the future of American innovation, and we’re proud to build on our long-standing U.S. investments with this $500 billion commitment to our country’s future,” Cook wrote in a company blog post.
Despite these efforts, Apple remains vulnerable to tariff threats.
“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 on Truth Social. “If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.”
Apple has already warned of a $900 million tariff-related impact this quarter, with its international production hubs—particularly in countries facing higher duties—seen as a key risk.
Trump’s targeting of Apple is not unprecedented. However, analysts like Yahoo Finance’s Ben Werschkul note that such threats have historically not always led to action.
Industry experts are also skeptical about the feasibility of shifting iPhone production to the U.S.
Wedbush analyst Dan Ives warned that moving manufacturing stateside could drive iPhone prices up to $3,500—a move he called “a non-starter for Cupertino.” He added that a full transition would take five to ten years.
“We believe the concept of Apple producing iPhones in the U.S. is a fairy tale that is not feasible,” Ives stated.
Nancy Tengler, CEO and chief investment officer at Laffer Tengler Investments, dismissed Trump’s comments as “silliness,” telling Yahoo Finance, “It is ridiculous to think that Apple can move all of their manufacturing back to the United States.” She added, “It’s also ridiculous to think that consumers are willing to pay the $3,500 estimates for an iPhone if they are built in the United States.”
Beyond Apple, Trump also floated a potential 50% tariff on the European Union in a separate post, triggering a broader market sell-off.
Speaking during a Q&A at the White House, Trump made it clear that the tariff policy would not apply to Apple alone.
“It would be also Samsung and anybody that makes that product. Otherwise, it wouldn’t be fair,” he said. “Again, when they build their plant here, there’s no tariffs. So they’re going to be building plants here.”
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