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President Donald Trump has threatened Apple with a 25 per cent tariff on iPhones unless the company shifts production of its best-selling product to the US, escalating a stand-off with chief executive Tim Cook.
Cook said this month that Indian factories would supply the “majority” of iPhones sold in the US in the coming months, as Apple tries to avoid the tariffs on Chinese-made goods imposed by Trump as part of his trade war.
“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 wrote in a Truth Social post on Friday.
“If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.”
Apple sells more than 60mn iPhones in the US a year. The Financial Times previously reported that the company planned to source all of those devices from India by the end of next year.
Foxconn, a key Apple supplier, is investing $1.5bn to expand iPhone production in India with a display module facility near Chennai, the FT reported earlier on Friday.
Apple shares fell around 2.5 per cent in New York trading on Friday. The company did not immediately respond to a request for comment.
The company’s stock lost more than $300bn in a single day last month, after Trump threatened huge new tariffs on dozens of countries, including all of Apple’s biggest manufacturing hubs around the world.
The US subsequently granted an exemption from many of those tariffs for smartphones and other electronics, and earlier this month Trump agreed to temporarily reduce levies on imports from China.
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Trump’s latest threat comes a week after he complained about “a little problem with Tim Cook” over Apple’s plans to expand iPhone manufacturing in India. He claimed at the time that Apple would be “upping their production in the United States” following a discussion with the big tech company’s boss.
Trump’s outburst comes at a time when the US and India are negotiating a bilateral trade agreement, meant to fend off a threat by the US leader to slap a 26 per cent tariff on Indian goods.
Prime Minister Narendra Modi’s government has encouraged electronics production in the world’s most populous country — now the world’s second largest smartphone market after China — by offering investors billions of dollars’ worth of production-linked incentives.
Though China remains by far Apple’s biggest production base, Foxconn and Tata Electronics are building out operations supplying Apple in India’s southern Tamil Nadu and Karnataka states. India contributed 18 per cent of global iPhone production in 2024, and the share should go to 32 per cent in 2025, according to Hong Kong-based Counterpoint Research.
Cook was one of the few Big Tech executives to build a productive relationship with Trump during the latter’s first term in office, helping Apple avoid threatened tariffs on its iPhones and smart watches.
The president’s newest ally in Silicon Valley is Nvidia’s chief Jensen Huang, who has pledged to spend hundreds of billions of dollars to build artificial intelligence infrastructure in the US.
At an event in Riyadh last week, Trump lavished praise on Huang, saying: “Tim Cook isn’t here but you are.”
Since Cook attended Trump’s inauguration in January, he has been in regular contact with the president and his administration. Apple has pledged to spend hundreds of billions of dollars in the US over the next four years, including by buying chips and AI servers made in America.
However, the challenges of replicating its Asian supply chain and production facilities for a product as complex as the iPhone in the US are significant. Analysts estimate the costs will probably run into tens of billions of dollars and take many years to complete.
Before Trump put his China tariffs on hold, Apple had said it expected to face hundreds of millions of dollars in extra costs due to the new duties, warning that the ultimate impact was hard to predict.
