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U.S. President Donald Trump has escalated his trade war rhetoric by threatening hefty tariffs on Apple and the European Union, in a bid to bolster domestic manufacturing and assert trade dominance.
In a series of posts on his Truth Social platform, Trump stated, "I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S."
This threat triggered a 2.6% drop in Apple shares, cutting its market valuation by nearly $70 billion. The U.S. is Apple's largest market, with over 60 million iPhones sold annually. Despite this, Apple continues to rely heavily on Chinese assembly plants, though CEO Tim Cook revealed in a recent earnings call that "the majority of iPhones sold in the U.S. for the June quarter will have India as their country of origin."
Trump's comments come amid Apple's gradual production shift to India and Vietnam, with Foxconn recently announcing a $1.5 billion investment in Indian operations. Nonetheless, Trump remains firm in his stance. "We're not interested in you building in India, India can take care of themselves ... we want you to build here," he told Cook.
Simultaneously, Trump is pushing for a sweeping 50% tariff on imports from the European Union. "Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025," he posted, criticizing the bloc as "very difficult to deal with.
The EU has yet to comment on the threats. Trade expert Aslak Berg observed, "We have to keep in mind that at this point, this is a threat. It's not an announcement. There is no executive order." Still, the impact on global markets was immediate, with major indices including the S&P 500 and Germany's DAX registering significant losses.
Analysts caution that relocating iPhone manufacturing to the U.S. would be costly. Wedbush Securities warned that U.S.-made iPhones could cost up to $3,500 each, due to infrastructure and labor limitations. "We believe the concept of Apple producing iPhones in the U.S. is a fairy tale that is not feasible," said analyst Daniel Ives.
