Trump’s Bold Ultimatum: 25% Tariff on Apple Unless iPhones Are Made in America | CNN Business

Recently, President Donald Trump urged Apple to manufacture its iPhones in the United States. He warned that if they don’t, Apple could face a hefty 25% tariff. Trump expressed his concerns on social media, specifically targeting Apple CEO Tim Cook, insisting that iPhones sold in America should not be built in India or elsewhere.

This demand comes amidst Apple’s efforts to diversify its manufacturing. They’ve already started producing some iPhones in India. In a recent call with investors, Cook mentioned that he expects most iPhones sold in the U.S. will come from India in the future.

However, the financial implications are significant. Cook indicated that Apple might face a tariff burden of around $900 million in a particular quarter. This could have been worse, as Trump recently exempted many electronics from tariffs targeting China, a relief for companies like Apple that rely heavily on Chinese production.

With roughly 90% of iPhone production based in China, moving factories to the U.S. presents numerous challenges. Apple has been investing billions in training skilled engineers abroad. Countries like China and India have larger pools of talented workers, which is a crucial factor for Apple’s manufacturing decisions. Producing iPhones in the U.S. could raise the price significantly, potentially tripling the cost to over $3,500 per device, according to experts.

The tech landscape is constantly evolving. Dan Ives, an analyst at Wedbush Securities, emphasizes that relocating production to the U.S. may be unrealistic. He believes it would take about $30 billion and three years just to move 10% of the supply chain back home.

Although moving production may be out of reach, Apple announced a $500 billion investment to expand its U.S. facilities. This includes a new plant in Houston that will produce servers, previously manufactured overseas. The aim is to support a new line of artificial intelligence products.

Historically, Apple’s late CEO, Steve Jobs, highlighted the challenges of bringing manufacturing back to the U.S., citing the lack of trained engineers as a significant barrier. Both he and Cook have long expressed a desire for more U.S. production, but have recognized the complexities involved.

As Trump exerts pressure on American companies, the ongoing dialogue about manufacturing, tariffs, and global supply chains remains critical. Whether Apple can respond effectively while balancing costs and production still hangs in the balance.

For more detailed insights into the implications of Trump’s tariffs and Apple’s strategies, you can read about it on CNN.

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