Apple plans to ramp up iPhone shipments from India in a frantic bid to offset the cost of President Trump’s China tariffs — after experts warned that the price of the popular smartphone could balloon to more than $2,000.
The move is intended to only be temporary while the tech giant attempts to receive an exemption from the aggressive tariffs, as it did during the president’s first term, people familiar with the matter told the Wall Street Journal.
Chinese imports were hit with a 54% markup as part of the White House’s “Liberation Day” tariffs. Meanwhile, India was levied with a 26% rate on its products.
Trump then threatened Monday to hit China with an additional 50% tariff if Beijing doesn’t lower its 34% retaliatory tariff on the US by Tuesday.
Already, the current 54% tariff stands to add more than $1,000 to the price tag for the newest iPhones — which means the latest models could cost an eye-watering $2,300, experts said.
This year, Apple will make about 25 million iPhones in India, about 10 million more than usual, Bank of America analyst Wamsi Mohan told the WSJ.
If the company opts to redirect all India-made iPhones to the US, then that would cover around 50% of demand for this year, Mohan added.
The “Liberation Day” tariff plan was a “Declaration of Economic Independence,” President Trump has said — with the levies intended to push companies towards building a better manufacturing base in the US.
However, critics have argued that manufacturing domestically would inflate prices.
“If consumers want a $3,500 iPhone we should make them in New Jersey or Texas or another state,” research firm Wedbush said in a recent note.
The bulk of the iPhone’s components are made in China, but in recent years, Apple has assembled more of the devices in India. This allows the company to label it as the country of origin on those devices instead.
Still, the primary production remains in China, where manufacturing partners like Foxconn are based.
Meanwhile, assembly of iPads, AirPods, and the Apple Watch has been ramped up in Vietnam, which was slapped with a 46% tariff.
In the wake of the sweeping tariffs, Apple has pledged to “spend and invest” $500 billion toward the US economy.
The company will hire 20,000 new employees and build a new manufacturing facility in Houston that will build AI servers to power AI features on devices like the iPhone, CEO Tim Cook said.
