Trump Warns Apple: Manufacture iPhones in the U.S. or Face 25% Tariff
— Apple faces a $3,500 iPhone dilemma as Trump threatens 25% tariff on devices made outside the U.S.
On May 23, 2025, President Donald Trump issued a stern warning to Apple Inc., threatening a 25% tariff on iPhones manufactured outside the United States. This move is part of Trump's broader push to encourage American companies to bring manufacturing back to the U.S. He emphasized that iPhones sold within the U.S. must be produced domestically, not in India or any other foreign country.
Apple has been shifting iPhone production to India, aiming to manufacture most U.S.-bound phones there by 2026 to circumvent higher tariffs from past U.S.-China trade tensions. Industry analysts caution that moving production to the U.S. could drastically increase iPhone prices—potentially tripling to around $3,500—due to the limited domestic tech manufacturing infrastructure. Transitioning even 10% of Apple’s supply chain to the U.S. could cost $30 billion and take approximately three years.
The announcement had immediate market repercussions. Apple's shares fell by nearly 2.5% following the tariff threat. Additionally, the Dow Jones Industrial Average dropped over 300 points, reflecting investor concerns over escalating trade tensions.
Trump's tariff threats extend beyond Apple. He also proposed a 50% tariff on European Union imports starting June 1, citing unproductive trade negotiations and what he described as unfair EU trade practices. These developments caused Dow Futures to drop roughly 400 points, ending a six-week market rally spurred by earlier de-escalation.
While it remains uncertain whether Trump has the authority to impose such company-specific tariffs, his statements emphasize his continued focus on domestic manufacturing and trade imbalances. High-level talks between U.S. and EU officials were scheduled for later that day to address trade concerns.
As of now, Apple has not issued a public response to Trump's comments. The tech giant faces a complex decision: comply with the demand to shift production to the U.S., which would involve significant costs and logistical challenges, or continue its current manufacturing strategy and risk substantial tariffs.
