U.S. President Donald Trump said on Friday that Apple would have to pay a 25 per cent tariff if phones sold in the country were not made within its borders, reported Reuters.
Shares of Apple dropped 2.5 per cent in premarket trading on Trump’s warning, dragging down U.S. stock index futures lower.
“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,” Trump said in a post on Truth Social.
“If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.”
It is not clear if Trump can levy a tariff on an individual company. Apple did not immediately respond to a Reuters request for comment. Apple shares fell 2 per cent on Friday morning and are down more than 21 per cent this year.
Apple is positioning India as an alternative manufacturing base amid Trump’s tariffs on China that have raised supply-chain concerns and fears of higher iPhone prices, Reuters reported last month.
The iPhone maker said most of its smartphones sold in the United States would originate from India in the June quarter.
Apple sells over 60 million iPhones in the US annually with roughly 80 per cent of them made in China currently.
On May 15 Trump spoke to Apple Inc. CEO Tim Cook in Doha, Qatar, and told him there’s no need to build factories in India unless it’s to serve that market specifically.
Prohibitively expensive
According to Axios, “analysts have said a U.S.-manufactured iPhone would be prohibitively expensive.”
"For US consumers, the reality of a $1000 iPhone being one of the best-made consumer products on the planet would disappear," Wedbush Securities analyst Dan Ives wrote recently.
He suggested making iPhones in “New Jersey, or Texas, or another state” would boost their price tag to $3500.
