“What if the next iPhone cost $3,500, would you still buy it?” That’s the question hanging in the air after U.S. President Donald Trump publicly took aim at Apple CEO Tim Cook. In a blunt remark, the U.S. President accused Apple of “building all over India” instead of bringing jobs back to American soil.
What began as a political jab has now turned into a high-stakes showdown between the world’s most powerful politician and one of the world’s most valuable companies.
Where Should iPhones Be Made?
Trump’s frustration isn’t new. His “America First” agenda has long pushed for U.S. manufacturing to return home, and he sees every iPhone made in India as a missed job opportunity for American workers.
To pressure Apple, he’s floated a 25% tariff on iPhones made outside the U.S., a threat that rattled markets and sent Apple’s stock into a dip.
But Apple’s expansion into India is no accident. It’s a strategic move to cut dependence on China amid U.S.-China tensions, rising labor costs, and regulatory risks.
India offers lower wages, government incentives, and a booming smartphone market.
India Takes the Lead
In just one year, Apple’s India production surged by 60% to $22 billion, with manufacturing partners like Foxconn and Tata driving growth. In a historic first, from April to June 2025, India overtook China as the top iPhone supplier to the U.S., shipping nearly 12 million units compared to China’s 7 million.
This milestone, however, has only fueled Trump’s criticism, as he also blasts India for imposing high tariffs on U.S. goods.
Why U.S. Made iPhones Don’t Make Sense
The numbers paint a grim picture for Trump’s demand. Wedbush Securities estimates that moving just 10% of Apple’s supply chain to the U.S. would cost $30 billion over three years.
Bank of America analysis warns that fully U.S. assembled iPhones could see prices soar to $2,300–$3,500, depending on tariffs and localization costs. That’s because labor and overhead per iPhone in China average $10–$12, compared to $25–$30 in the U.S.—a 150% jump.
Market research shows demand collapses if iPhones cross the $2,000 mark, with sales potentially plummeting by 60%. Tim Cook himself put it bluntly: “The U.S. is simply not made for iPhone production at scale.”
A Supply Chain Too Complex to Rebuild
An iPhone is a truly global product, assembled from 2,700 components sourced across 28 countries.
Recreating that supply chain entirely in the U.S. is a near impossible task that would wreck Apple’s pricing, margins, and competitiveness.
For now, Trump’s proposed 50% import tariff on Indian goods doesn’t cover smartphones, but the threat looms.
Apple, however, remains steadfast in expanding in India, betting on diversification as its shield against global uncertainty.
