Apple under pressure as Trump threatens 25% tariff on foreign-made iPhones
Published: 09:14 23 May 2025 EDT
Apple Inc (NASDAQ:AAPL, ETR:APC) shares moved almost 4% lower before Friday’s opening bell after US president Donald Trump threatened to impose a 25% tariff on Apple products unless iPhones sold in the United States are manufactured domestically rather than in countries like India or China.
Apple has been shifting some of its iPhone manufacturing to India as part of its supply chain diversification in response to Trump’s tariffs on China.
“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump wrote in a post on his social media platform Truth Social.
“If that is not the case, a Tariff of at least 25% must be paid by Apple to the US. Thank your for your attention to this matter!”
Wedbush analysts noted Trump’s “eye-opening” post creates a frustrating situation for investors.
They believe the concept of Apple producing iPhone in the US is a “fairy tale that is not feasible.”
“The pressure from Trump Administration on Apple to build iPhone production in the US as we have discussed this would result in an iPhone price point that is a non-starter for Cupertino and translate into iPhone prices of ~$3,500 if it was made in the US which is not realistic as this would take 5-10 years to shift production to the US,” they wrote.
Kathleen Brooks, research director at XTB research director, said Trump’s attack on Apple appears to be a negotiating tactic, and that the timing is “no surprise.”
“The Budget bill has gone to the Senate, and Trump needs to raise more revenue to lower the deficit,” Brooks explained.
“This looks like a negotiating maneuver to get Apple to pay the bulk of their tax in the US, including taxes for non-US sales. If this happens, then we would not be surprised to see the iPhone tariff disappear. While Apple’s tax take would not solve the US’s deficit problem, it would make a good headline for the President.”
In addition to targeting Apple, Trump also threatened a 50% tariff on imports from the European Union.
“The European Union, which was formed for the primary purpose of taking advantage of the United States on TRADE, has been very difficult to deal with,” Trump wrote on Truth Social.
“Their powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against Americans Companies, and more, have led to a Trade Deficit with the US of more than $250,000,000 a year, a number which is totally unacceptable.”