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US President Donald Trump has issued a stark warning to Apple CEO Tim Cook, insisting that the company should halt the manufacturing of iPhones in India or any other overseas location. He further threatened that if the company proceeds with offshore production, Apple would face a hefty 25% tariff from the government. This announcement led to an immediate decline in Apple’s stock, which fell over 2.5% in premarket trading.
“I have previously informed Tim Cook of Apple that I expect their iPhones sold in the United States of America to be manufactured domestically, not in India or elsewhere,” Trump stated in a post on Truth Social. He added, “If this expectation is not met, a tariff of at least 25% will be required to be paid by Apple to the US.”
The legality of Trump’s ability to impose tariffs on a specific company remains uncertain. It is important to note that Apple has been considering India as a viable alternative manufacturing hub, especially given Trump’s imposing tariffs on China, Taiwan, and Vietnam. The aim is to alleviate concerns surrounding supply chain vulnerabilities while reducing the risk of increased iPhone prices or diminished profit margins.
In earlier discussions, Trump expressed his desire for Tim Cook to ramp up production within the United States, emphasizing his preference for keeping manufacturing infrastructure out of the Indian market.
In contrast, Apple has ambitious plans to source a substantial portion of its US iPhone supply from India by the year 2026. Currently, the majority of iPhones produced in India are assembled at Foxconn’s facility located in southern India. Additionally, Tata Group has emerged as a significant player in this landscape, especially after acquiring Wistron’s local operations and managing Pegatron facilities. Both Tata and Foxconn are investing in the establishment of new plants to enhance production capabilities. In the fiscal year ending on March 31, Apple assembled iPhones valued at $22 billion in India, marking a nearly 60% increase compared to the previous year.
Historically, Apple has produced the bulk of its iPhones in China, with no existing smartphone manufacturing operations in the United States at present. This shift towards India underscores Apple’s strategic pivot to diversify its manufacturing base, particularly amidst ongoing global trade tensions and rising production costs in China.
The implications of Trump’s remarks resonate deeply within the tech industry, particularly as companies are increasingly looking to streamline their operations in response to tariffs and trade policies. As both domestic and international manufacturing landscapes become more challenging, Apple’s commitment to establishing a robust production network in India signifies a broader trend among multinational corporations to adapt to changing economic conditions.
The collaboration between Apple, Foxconn, and Tata represents a critical step in the journey towards building a more resilient supply chain within the country. As these companies expand their production capacities, it is likely to create a ripple effect in the local economy, potentially leading to job creation and technological advancement in the region.
While the future remains uncertain, the combination of geopolitical factors and market dynamics will undoubtedly influence Apple’s ongoing strategy. As the company navigates through these challenges, all eyes will be on the decisions it makes in response to both Trump’s warnings and the opportunities that lie ahead in the Indian market.
