The relationship between President Donald Trump and Apple CEO Tim Cook is deteriorating over Apple’s strategy to source iPhones primarily from India rather than the U.S. Trump expressed his discontent, stating he had “a little problem with Tim Cook.” He threatened to impose a 25% tariff on iPhones sold in the U.S. unless they are manufactured domestically. Cook recently confirmed Apple’s plans during an earnings call, further aggravating Trump, who insisted that he expects iPhones sold in the U.S. to be produced in America.
Analysts suggest that it might be more beneficial for Apple to absorb the tariff costs rather than relocate production back to the U.S. UBS analyst David Vogt noted the potential tariffs would pose only a modest financial challenge, reducing Apple’s earnings per share slightly. However, experts agree that manufacturing iPhones in the U.S. would significantly increase retail prices, estimates ranging from $1,500 to $3,500, due to higher labor costs and logistical complexities.
Many analysts consider the notion of a U.S.-made iPhone a “fairy tale,” citing the extensive time and investment required to establish assembly lines and supply chains in the U.S. While some of Apple’s products are currently exempt from tariffs, uncertainty looms regarding the future of Trump’s tariff plans.
Despite ongoing tensions, some analysts believe Apple might negotiate a deal or potentially challenge the tariffs legally. For now, Apple continues to enhance its operations in India, with Foxconn investing in a new factory that could increase local production. Apple has not commented on Trump’s recent threats.
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