


SAN FRANCISCO >> Lashing out at Apple’s plans to make most of its U.S. iPhones in India, President Donald Trump on Friday threatened to slap a 25% tariff on the popular device unless the tech giant starts building the product in its home country — a move that still seems unlikely to happen any time soon, if ever.
Apple for decades has been building most of its devices in China, where it has invested tens of billions dollars massive factories that rely on a vast network of local suppliers. The company’s reliance on a crucial pipeline outside the U.S. thrust the technology trendsetter into the crosshairs of Trump’s trade war.
In response to Trump’s tussle with China, Apple CEO Tim Cook said most iPhones sold in the U.S. during the March-June period would come from India. Although Trump in late April decided to temporarily exempt the iPhone and other electronics from most of his initial tariffs, Cook said the trade war would end up costing Apple an additional $900 million during the March-June period.
After Trump initially unveiled his sweeping tariffs in early April, industry analysts estimated the fees would drive up the cost of a $1,200 iPhone made in China to $1,500. That might sound steep, but most analysts believe if Apple somehow could suddenly start making iPhones in the U.S., prices for the devices would soar to at least $2,000 and possibly might rise as high as $3,500.
The disincentives for Apple shifting its production domestically include a complex supply chain that Cook began to engineer during the 1990s while he was working for his predecessor, company co-founder Steve Jobs, who died in 2011. It would take several years and cost billions of dollars to build new plants in the U.S. Combined with current economic forces, the price of an iPhone could triple, threatening to torpedo sales of Apple’s marquee product, which generated revenue of $201 billion during the company’s last fiscal year.
“The concept of making iPhones in the U.S. is a nonstarter,” asserted Wedbush Securities analyst Dan Ives, reflecting a widely held view in the investment community that tracks Apple’s every move.