Donald Trump has threatened to impose a 25% tariff on iPhones if they are not made in the United States, as he stepped up the pressure on Apple to build its signature product in the country.
The president wiped approximately $70bn (£52bn) off the company’s shares with a post on the Truth Social platform that said iPhones sold inside the US must be made within the country’s borders.
Trump said in the post: “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 US.”
Apple shares fell 2.6% on Trump’s comments, pushing the company’s valuation just below $3tn.
Apple won’t be alone. In remarks to reporters at the White House on Friday afternoon, Trump said that he would also impose a 25% tariff on Samsung and any other phone manufacturer that makes phones outside of the US, or, he said, “it would not be fair.”
“When they build their plant here, there’s no tariffs. So they’re going to be building plants here,” Trump said.
Trump alarmed Apple investors last month with a series of escalating tariff announcements on goods from China, where the majority of iPhones are assembled, which ratcheted up to total 145%. A couple of days later, however, the administration announced an exemption for smartphones and computers.
Soon afterwards, it was reported that Apple was planning to switch assembly of all iPhones for the US market to India in an attempt to swerve the impact of Trump’s trade war with China.
Cook, Apple’s chief executive, said in an earnings call this month that the majority of iPhones sold in the US for the June quarter would “have India as their country of origin”. The company is secretive about details of its production processes but analysts estimate that about 90% of its smartphones are assembled in China.
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The US is Apple’s biggest iPhone market, where it sells more than 60m of the handsets annually.
Trump rebuked the tech company and its chief executive this month over the switch. “I had a little problem with Tim Cook,” he said, adding: “I said to Tim … ‘we’ve treated you really good, we’ve put up with all the plants that you’ve built in China for years, now you got to build [for] us. We’re not interested in you building in India, India can take care of themselves … we want you to build here.’”
Analysts have warned that moving US-bound iPhone production to the States would be prohibitively expensive, owing to the lack of facilities and flexible workforce that Apple has access to in China. Wedbush Securities, a financial services firm, said last month that an iPhone made in the US would be more three times more expensive than now at $3,500.
