Donald Trump may threaten Apple, but its reliance on China is deep-rooted

In a fresh bid to bolster domestic manufacturing, former US President Donald Trump has renewed calls for Apple to produce iPhones on American soil. Taking to his platform Truth Social, Trump warned that iPhones made outside the US—whether in China, India or elsewhere—should attract a 25 per cent import tariff if sold in the American market.

“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 posted. “If that is not the case, a Tariff of at least 25 per cent must be paid by Apple to the US.”

The remarks have reignited debate over the feasibility of a 'Made in America' iPhone—a politically attractive idea, but one that faces immense logistical, economic, and workforce-related challenges.

Despite the rising rhetoric, Apple’s reliance on China remains deep-rooted. Over 80 per cent of its devices are manufactured there, thanks to an agile industrial ecosystem, an expansive and cost-effective workforce, and suppliers like Foxconn, which can mobilise tens of thousands of workers in mere weeks.

In comparison, US labour is significantly more expensive and subject to stricter regulatory frameworks. California, for instance, mandates a minimum wage of $16.50 per hour, while Chinese assembly-line workers at Foxconn earn a fraction of that.

Then there’s the issue of skilled manpower. In a previous interview, Apple CEO Tim Cook noted that the US lacks the engineering specialisation required for high-precision hardware production. “You could fill several football fields with tooling engineers in China,” he said, “but in the US, that might fill one room.”

Even if Apple were to move final assembly to America, the bulk of components would still come from Asia. Key parts such as processors, displays, and cameras are manufactured in Taiwan, South Korea, and China. Shifting this entire supply chain would require a decade or more—and tens of billions in investment.

A prior attempt by Foxconn to establish a $10 billion plant in Wisconsin during Trump’s earlier term fell flat. Though it promised 13,000 jobs, it only created about 1,450 positions, many unrelated to electronics.

India has emerged as a strategic alternative for Apple, now accounting for approximately 15 per cent of global iPhone production, or around 40 million units annually. Apple ramped up local assembly by 60 per cent in FY2024, reaching an estimated production value of $22 billion. But industry experts point out that these Indian plants mostly perform final assembly—snapping together components manufactured elsewhere—rather than full-scale manufacturing.

India, however, offers certain advantages: a large pool of engineers, government subsidies, lower wages, and a rapidly growing smartphone market. The Indian government is optimistic that commercial logic—rather than geopolitical pressure—will dictate Apple’s decisions. “Apple will weigh profits over any pressure from the Trump administration,” a senior Indian government official told a local news outlet.

Apple has made some moves to appease both US political interests and local sentiments. The company has assembled a limited number of Mac Pro units in Texas and invested heavily in US-based AI and semiconductor projects. But these remain marginal in comparison to the scale of its overseas operations.

While the image of an American-built iPhone may appeal to political rhetoric and national pride, the practical and economic realities suggest otherwise. Building iPhones entirely within the United States would demand a sweeping transformation of workforce capabilities, infrastructure, and supply chains—and result in a significantly more expensive product for consumers.