Trump demands 25% tariff on any iPhone not made in the US

AppleInsider

President Trump continues to emphasize that Apple must make the iPhone in the United States, or a steep import tariff will continue to be applied to the company.

President Trump believes iPhone production could move to the United States.

Tim Cook previously managed to secure significant tariff exemptions from Trump, even if they were officially only temporary. Now, following Trump's telling Cook to build iPhones in the US instead of India, Apple is being threatened with what appears to be a brand new tariff.

Now Trump has announced on his Truth Social platform that there will be a penalty if Apple does not move manufacturing to the States.

It's curious that Trump claims to have informed Cook long ago, but perhaps more significant is who he says will pay the tariff. The White House has continued to maintain that it is foreign countries who pay the tariffs, but Trump has here acknowledged that it would be the US business.

Apple has not commented on either this new announcement. They have also not commented on Trump's previous remarks about its expansion in India.

It's not clear if the stated 25% tariff is on top of current tariffs against the various countries that Apple can import iPhones from, or a replacement -- but the former is more likely given previous statements and tariff actions made in this administration. There is also currently an investigation into the national security implications of semiconductor manufacture, which is expected to conclude with a further tariff.

As with previous Trump announcements, the stock market is continuing to be volatile. In pre-market trading, at time of writing and after the post on social media, AAPL shares were down 3.44%.

What happens next

Apple cannot make the iPhone in the US -- there is not the required skilled labor, there is not a supply of the rare minerals needed, and there are no facilities. Trump's belief that it is possible is political posturing, as is commerce secretary Howard Lutnick's bizarre claim that Apple just needs robot arms.

Consequently, the "reciprocal" tariffs that were purportedly intended to drive manufacturers back to the US, have instead just profited other countries. Firms including Apple have been reshoring their supply and distribution to have devices come to the US from those countries that are the least affected by tariffs.

Every country is affected, there are no regions where the tariffs do not affect Apple and its suppliers. But Apple expected to spend $900 million in its June quarter, solely on these efforts to minimize the impact of Trump's tariffs.

Revealing this sum during the last earnings call, Tim Cook also stressed that it was calculated assuming there would be no more tariffs. It wasn't that Apple didn't expect further tariffs, just that it was impossible to assess what they could be.

Now Apple has been told that it must pay a quarter of the value of each iPhone that is imported, regardless of where they come from. This doesn't mean that Apple's reshoring has necessarily been wasted, as it's far from clear whether other country tariffs will also be applied.

Nonetheless, even if Apple has not budgeted for this extra tariff, it won't change the overall situation. Even if it were physically possible for Apple to move manufacturing over to the US, it would remain cheaper to pay the tariff than to build up the facilities and train enough staff.

Such a manufacturing move would take many years to complete, too, during which Apple would presumably still have to pay this new tariff.



Read on AppleInsider

nickott

This spitting out tweets on a whim cannot continue! This azzhole president is thoughtlessly playing with peoples lives. Is it even legal to tariff a specific company? 

debonbon

From the party of “small government”…

applesauce007

This appears to be a market manipulation play for friends and family members.
Such threats  on social networks are unbecoming of a POTUS and should be illegal.

foregoneconclusion

Trump doesn’t have legal authority to levy tariffs. The emergency power statute that he’s citing is for sanctions only. No mention of of tariff or taxation power in the language so it fails the Supreme Court’s Major Questions Doctrine.

applezulu

Waiting for the reality-defying explanation from @9secondkox2 about how this is “all part of the plan.”

Even if Apple thought they could move iPhone manufacturing to the US, it would take years. A 25% tariff now isn’t going to help with that. 

Watch instead for some bluster followed by a reversal. Watch for Trump and his inner circle to buy Apple stock this afternoon and sell after the reversal. 

cujoyyc

applesauce007 said:

This appears to be a market manipulation play for friends and family members.
Such threats  on social networks are unbecoming of a POTUS and should be illegal.

Illegal is on brand for Trump. And to be fair, the convicted felon ought to have been locked well before the 2024 election. 

stationgrey

When is this fat imbecile going to be stopped? He's trying to single-handedly destroy the US and its businesses, while making as many people as possible suffer, just to appease his inner pschyopath.

Whether his rationale is mental illness, utter stupidity and ignorance, or malevolence, has stopped being relevant. He needs to be stopped asap, and his issues can be addressed later.

nubus

NickoTT said:

Is it even legal to tariff a specific company? 

We're beyond that. Harvard, Apple, a free 747-8, deporting US citizens, using the South Lawn as a dealer lot for Tesla, forcing Microsoft to block mail access for UN employees in Europe.... and tariffs at 145% or 10% or 25% or now 50% towards Apple, China, EU, an island with penguins... 

There is no way of calculating a business case with US manufacturing being far more expensive than just 25% compared to India. Apple might promise to build factories to get a cut on the tariffs. Then plan and build for 3 years, see Trump leave or markets crash, and use the buildings for data centers.

fred1

The reasons given that prevent iPhones from being made in the US - “there is not the required skilled labor, there is not a supply of the rare minerals needed, and there are no facilities.” - can be dealt with, but would take years to implement. It’s not impossible, but the overnight change the Orange Man wants can’t happen.  Does he really not understand this? 

gatorguy

AppleZulu said:

Waiting for the reality-defying explanation from @9secondkox2 about how this is “all part of the plan.”

Even if Apple thought they could move iPhone manufacturing to the US, it would take years. A 25% tariff now isn’t going to help with that. 

Watch instead for some bluster followed by a reversal. Watch for Trump and his inner circle to buy Apple stock this afternoon and sell after the reversal. 

So am I. I suspect he won't post a word. 

saarek

No problem, just add 25% to the price in the USA and let customers know why. The Orange one will soon back track.

carmb

In the first place, you can't just impose a special tariff on one specific company. In the second place, even with such a tariff, it would still be cheaper to assemble iPhones abroad. This is more silliness from Trump but what matters here is that this silliness is no joke. Do it long enough, and Trump seems intent on doing it for a while, and it will have a negative impact on the economy. There has never been a more anti-business president than Trump 2.0. He's acting as if companies like Apple and Walmart are to do his bidding. That's not how it has worked and nor should it. Really, though, it's not that Trump can force Walmart to set prices to Trump's liking or just slap a tax on Apple because he doesn't like where they're making their product. It's that Trump is doing everything possible to disrupt economic activity. He wants headlines and says or posts  whatever he thinks will generate media attention. When that's the norm, doing business is turned into an ordeal. That will have real consequences and with Trump being as overbearing as he is being, trying to blame it on the Democrats just isn't going to work. Trump now gets everything he wants from the Republican Party and, often it seems, the Supreme Court. If the economy stumbles, he'll own it. Period. Honestly, I don't see how the US economy can do anything but stumble the way Trump is operating. It may take a few more months for many Americans to start feeling the impact of his incompetence but feel it they will. 

reroll

Hey… what did you expect?

blastdoor

fred1 said:

The reasons given that prevent iPhones from being made in the US - “there is not the required skilled labor, there is not a supply of the rare minerals needed, and there are no facilities.” - can be dealt with, but would take years to implement. It’s not impossible, but the overnight change the Orange Man wants can’t happen.  Does he really not understand this? 

Agreed. Stating that’s it’s physically impossible to manufacture iPhones in the US is over the top absurd and ultimately benefits Trump because it makes him look relatively less dumb than he would otherwise look.

of course it’s possible. It would just be more expensive to do that than pay the tariff, especially given that the tariff might not be there by the time the US supply chain is built.

foregoneconclusion

blastdoor said: of course it’s possible. It would just be more expensive to do that than pay the tariff, especially given that the tariff might not be there by the time the US supply chain is built.

A. Tariffs make imported materials and parts more expensive.
B. U.S. manufacturing relies heavily on imported materials and parts.

What do you think that adds up to? 

macgui

AppleZulu said:

Watch instead for some bluster followed by a reversal. Watch for Trump and his inner circle to buy Apple stock this afternoon and sell after the reversal. 

Then see him claim this whole circus act a "win".

stationgrey

blastdoor said:

fred1 said:

The reasons given that prevent iPhones from being made in the US - “there is not the required skilled labor, there is not a supply of the rare minerals needed, and there are no facilities.” - can be dealt with, but would take years to implement. It’s not impossible, but the overnight change the Orange Man wants can’t happen.  Does he really not understand this? 

Agreed. Stating that’s it’s physically impossible to manufacture iPhones in the US is over the top absurd and ultimately benefits Trump because it makes him look relatively less dumb than he would otherwise look.

of course it’s possible. It would just be more expensive to do that than pay the tariff, especially given that the tariff might not be there by the time the US supply chain is built.

Of course it's not physically impossible. But it's practically and financially impossible, and that amounts to much the same thing in business.

zimmermann

nubus said:

NickoTT said:

Is it even legal to tariff a specific company? 

We're beyond that. Harvard, Apple, a free 747-8, deporting US citizens, using the South Lawn as a dealer lot for Tesla, forcing Microsoft to block mail access for UN employees in Europe.... and tariffs at 145% or 10% or 25% or now 50% towards Apple, China, EU, an island with penguins... 

There is no way of calculating a business case with US manufacturing being far more expensive than just 25% compared to India. Apple might promise to build factories to get a cut on the tariffs. Then plan and build for 3 years, see Trump leave or markets crash, and use the buildings for data centers.

All over in Europe meanwhile organizations and governments are moving away from everything American: no cloud, no social media, no gmail, WhatsApp. No stocks. In the Netherlands they even have a National Get Away Day from WhatsApp! Microsoft is, as we speak, touring with their highest managers around the countries in Europe to make believe that there is no risk to our data. And on the same day a high official in the International Criminal Court could suddenly not access his email (Microsoft) anymore. This is not profitable for your great country, and is going to last for years, if not forever. Destructor in Chief…

zimmermann

No problem, just add 25% to the price in the USA and let customers know why. The Orange one will soon back track.

And get richer cause he bought Apple stocks.

strangedays

“Siri, what does extortion look like…”