Trump Plans 25% Tariff on Foreign-Made Smartphones
Donald Trump has reignited trade tensions by threatening a 25% tariff on smartphones not made in the United States. His comments, posted on the Truth Social platform, targeted both Apple and Samsung. Trump emphasized that any iPhone sold within the country must be built domestically or face the new tariff. He stated, “If that is not the case, a Tariff of at least 25% must be paid by Apple to the US.”
Following this announcement, Apple’s shares dropped 2.6%, wiping nearly $70 billion off its market value. Samsung, though not publicly traded in the US, also faces the same threat. Trump explained that the policy is intended to be fair, adding, “When they build their plant here, there’s no tariffs. So they’re going to be building plants here.”
The US remains Apple’s largest iPhone market, with over 60 million units sold annually. However, the majority of these phones are assembled in China. Although Apple has attempted to diversify its supply chain by shifting production to India, Trump criticized this move. He claimed to have informed Apple CEO Tim Cook that building phones in India was unacceptable if they were to be sold in the US.
Apple’s India Strategy Faces Pushback
Recently, Apple began assembling more phones in India, hoping to avoid tariffs from Trump’s broader trade war with China. After the US briefly exempted smartphones and computers from new import duties, Apple confirmed that most iPhones sold in the US during the June quarter would originate from India.
Nonetheless, Trump remained unsatisfied. In remarks at the White House, he said, “We’re not interested in you building in India… we want you to build here.” Although the company has long relied on Chinese plants, shifting production to the US poses major challenges. Cook has not responded directly to Trump’s latest threat.
Production Costs Could Skyrocket
Industry analysts warn that manufacturing iPhones in the US would be prohibitively expensive. Unlike China, the US lacks the facilities and trained labor force necessary for large-scale smartphone production. Wedbush Securities estimated last month that a US-assembled iPhone could cost around $3,500—more than three times its current price.
Therefore, while the threat of tariffs might push Apple and others to reconsider their global production strategies, the economic impact on consumers and tech companies alike could be severe. Transitioning to domestic production, though politically appealing, may result in higher prices and slower output.
