Trump warns Tim Cook of 25% tariffs if iPhones sold in the U.S. are manufactured in India

Reigniting trade tensions on Friday, US President Donald Trump has declared that Apple will face a 25% tariff on iPhones sold in the United States if they are not manufactured within the country. The warning comes amid Apple’s ongoing efforts to diversify its production base away from China, with India emerging as a key player in that strategy. Apple currently produces about 15% of its iPhones in India and aims to raise this to 25% in the coming years.

Trump said last week that he had told Apple CEO Tim Cook at the Doha summit that he does not want the company to expand its manufacturing operations in India, unless it is to cater specifically to its domestic market. His fresh statement comes as India and the US are currently negotiating an interim trade deal.

This development comes weeks after Apple said that a majority of iPhones to be sold in the United States will be produced in India and its contract manufacturer Foxconn followed it up with a $1.49 billion investment plan in one of its India units.

HOW APPLE WILL BE BENEFITTED BY MANUFACTURING IN INDIA

However, a new report from the Global Trade Research Initiative (GTRI) has emerged, stating that even if the US were to implement such a tariff, the cost of manufacturing iPhones in India would still be much lower compared to if the devices were made in the US.

The GTRI report highlights that assembly workers in India earn approximately $230 per month, and when compared to US states like California, these costs could go as high as $2,900, marking a 13-fold rise in expenses.

While the iPhone assembly in India costs around $30 to Apple, the same process in the US would cost the tech giant $390. Moreover, Apple also gets additional benefits from the Indian government via the Production Linked Incentive (PLI) scheme.