I Don't Want You Building In India! US President Donald Trump Sends Clear Message to Apple CEO Tim Cook

During a recent event in Doha, Qatar, former U.S. President Donald Trump shared insights into his conversation with Apple Inc.'s CEO Tim Cook. Trump expressed to Cook that there was no necessity for Apple to establish factories in India unless it was specifically to cater to the Indian market. This discussion was reported by Bloomberg.

Trump mentioned that as a result of their dialogue, Apple would be increasing its production within the United States. He also highlighted India's offer to eliminate tariffs on U.S. goods. "India has offered us a deal where basically they are willing to literally charge us no tariff," Trump stated at the event attended by business leaders.

Why Does Donald Trump Wants Apple to Stop iPhone Production in India

Photo Credit: Reuters

Apple's Production Strategy

A source informed Reuters last month that Apple plans to manufacture most iPhones sold in the U.S. at Indian factories by 2026. This move aims to mitigate potential higher tariffs in China, Apple's primary manufacturing hub. Currently, over 60 million iPhones are sold annually in the U.S., with about 80% produced in China.

Manufacturing costs for iPhones in India are reportedly 5-8% higher than those in China, with some cases seeing a difference of up to 10%. To counteract Trump's tariffs, Apple has already increased production in India, shipping approximately 600 tons of iPhones worth $2 billion to the U.S. in March.

Impact on Global Manufacturing

The shipments from India set records for Apple's contractors Tata and Foxconn, with Foxconn alone accounting for $1.3 billion worth of smartphones, as reported by Reuters last month. In April, the U.S. administration imposed a 26% duty on imports from India, significantly lower than China's over 100% rate at that time.

Washington has since paused most duties for three months, except for those on China. In 2024, Apple manufactured around 40-45 million iPhones in India, representing 18-20% of its global output. Of these, approximately 14-15 million were exported to the U.S., while another 13 million went to other international markets.

Future Production Plans

Cook noted that during the June quarter, most iPhones sold in the U.S. would originate from India. Additionally, almost all iPads, MacBooks, Apple Watches, and AirPods sold in the U.S. will be produced in Vietnam.

"The existing tariffs that apply to Apple today are based on the product's country of origin... we do expect the majority of iPhones sold in the U.S. will have India as their country of origin and Vietnam to be the country of origin for almost all iPad, MacBook, Apple Watch, and AirPods products sold in the U.S." Cook stated during an earnings call earlier this month.

This strategic shift reflects Apple's adaptation to changing global trade dynamics and its efforts to diversify its manufacturing base beyond China while maintaining competitiveness across various markets.

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