President Donald Trump said Apple must pay a 25% tariff if it doesn’t rely on domestic production of iPhones for the U.S. market
Apple Inc. shares fell more than 3% on Friday after President Donald Trump threatened the company with tariffs if it doesn’t move more iPhone production stateside.
Shares of Apple Inc. fell more than 3% during premarket trading on Friday after President Donald Trump threatened the company with a tariff if it doesn’t make iPhones for the U.S. market stateside. One analyst called Trump’s dream of domestic iPhone production a “fairy tale.”
“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,” Trump said in a post on his Truth Social platform on Friday. “If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.”
However, analysts at Evercore ISI said in April they didn’t see iPhone production moving into the U.S., “as the higher labor costs alone would drive a >50% increase in iPhone manufacturing costs” — double the tariff Trump is now threatening to put on Apple.
“This implies that even under a 50% global baseline tariff it would not make financial sense to produce the iPhone domestically,” Evercore said last month.
Earlier this month, the president said he “had a little problem” with the Apple chief during a meeting between the two in Qatar. Trump has taken issue with the iPhone maker’s further expansion into India. Apple doesn’t produce any smartphones in the U.S., but has been diversifying its supply chain away from China since pandemic-era lockdowns and as geopolitical tensions between the two countries have intensified. The company has moved production into countries including India and Vietnam, but the Trump administration is still pushing for the company to bring its manufacturing stateside.
Apple did not immediately respond to a request for comment from MarketWatch.
As Trump floated massive tariffs on goods imported from China earlier this year, Dan Ives, a Wedbush Securities analyst, pointed out that most of the components used in iPhones are made abroad.
“If U.S. tech companies are faced with this reality, it will negatively change the tech landscape for decades to come,” Ives said in an April note. An iPhone made in the U.S. could cost $3,500, Ives said — more than double the current $1,000 price tag.
Ives reiterated his point in a note on Friday, saying that building iPhones in the U.S. “would result in an iPhone price point that is a non-starter for Cupertino and translate into iPhone prices of ~$3,500 if it was made in the US.”
He estimated that shifting production to the U.S. would take between five to 10 years, and called the idea “a fairy tale that is not feasible.”
In April, analysts at Gimme Credit said moving some iPhone production to the U.S. “cannot be done immediately.”
“It would take meaningful time and money to build and develop the physical infrastructure,” the analysts said. “More importantly, it is doubtful that the U.S. could provide the necessary labor force, both in terms of quality and quantity.”
The analysts noted that Apple would likely still have to import some components from China.
India produced about 20% of Apple’s iPhones — or more than 40 million devices — in the past year ending in March, according to Bloomberg. The company is now focused on sourcing most of its iPhones sold in the U.S. from India by the end of 2026, the report said.
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