Apple's iPhone manufacturing plan hit by Trump doubling tariffs on India
Apple's iPhone production shift to India has been hit by a doubling of tariffs, as President Donald Trump hammers the country for buying Russian oil.
The iPhone 17 is supposed to be imported to the U.S. from India - Image Credit: AppleInsider
Apple has worked hard to mitigate the effects of tariffs against its supply chain by diversifying away from a China-centric approach. While it has paid off so far for the iPhone maker, an unrelated presidential complaint may still harm the effort.
On Wednesday, President Donald Trump hit India with an additional 25% import tariff. The executive order is on top of the existing 25% tariff on Indian imports into the United States, reports the Financial Times.
While Trump's initial post on social media alluded to India selling oil to Russia, he's clearer about this now. The reason for the doubled tariff is due to oil, with India sourcing it from Russia.
Following the invasion of Ukraine, India moved from being a relatively small-time Russian crude oil importer to one of the biggest.
Trump said there would be an extra tariff on Monday, criticising India over the oil procurement, but didn't indicate how high the rate.
A White House official has since confirmed that, from August 27 when the duties take effect, imports from India will be set at a 50% rate. This is firmly in iPhone 17 import season.
A bad Apple deal
The new tariff punishing India over oil has the byproduct of impacting Apple at the same time.
Over the years, Apple has been trying to spread out its supply chain from China and into other territories. The initiative was meant to help Apple avoid the effects of major global events impacting the supply chain.
Following the U.S.-China trade war and the first tariff salvos in the second Trump administration aimed at China, Apple made the move to use its production capacity in India as a workaround. Rather than face triple-digit tariffs affecting Chinese imports, Apple would instead use India to produce iPhones destined for the United States.
When Trump implemented more tariffs affecting the rest of the world, the eventual result of a 25% tariff on India imports still seemed better than Chinese imports.
Now that there's another 25% on top, that means even Apple's India-produced iPhones face a hefty cost to be brought into the United States.
Failure to deal
The 50%, a doubling of the 25% that would impact India's imports, was previously 10%. Before the entire tariff saga started in April, the import tariff on goods sourced from India was just 3%.
However, that 25% and therefore the 50% could've been a lot less.
On July 29, an audio clip of Trump revealed that India had failed to finalize the deal, resulting in the 25% tariff. Trump also accused India of charging more tariffs than "almost any other country."
At the time, there was a glimmer of hope that it would be only a temporary situation. According to an Indian government official, talks were progressing, and a trade delegation from the U.S. was anticipated to visit New Delhi in the middle of August.
The report at the time proposed that trade negotiations would resume and a bilateral agreement would be reached by September or October.
On August 5, India's former finance secretary Subhash Garg told CNBC that a U.S.-India trade deal is unlikely, due to wildly differing positions on key political issues.
Garg's comments, as well as the extra oil-based tariff, makes the impact of the new tariff seem like it won't be a short-term pain point for Apple and others caught up in the new tariff fight.
Read on AppleInsider
Comments
They just need an exemption and looks like they getting they from all the US investment announcement today
stock is huge
From that article:
"I had a little problem with Tim Cook yesterday," Trump said to press on May 15, 2025, according to CNBC. "I said to him, 'my friend, I treated you very good. You're coming here with $500 billion, but now I hear you're building all over India.' I don't want you building in India."
"I said to Tim, I said, 'Tim look, we treated you really good, we put up with all the plants that you build in China for years, now you got build us," he continued. "We're not interested in you building in India, India can take care of themselves... we want you to build here'."
And, as a reminder, Apple paid $800 million in tariff increases last quarter, and is expecting another $1.1 billion before this doubling in the current quarter.
There has to be a reason Apple stock is up so much today
Feel like exemption deal has been struck
Just based on the investment news , stock won’t be moving that much
i do this for a living
we will see. You might be right , no exemption but we have people in our building who feel otherwise
It’s been a hated name in a bull market last 3 months .
so for a stock with this back drop to be moving this much , it has to be something material. And yes we do go by feel and sources quite a bit , otherwise , if we always wait until things are annoyed on CNBC, it will be too late. That is when we sell the news .
Your post above actually made my point for me.
as we write this , we are getting more confirmation that Apple will indeed be exempt from Indian tariffs
Apple stock is not mercurial at all. It in fact does not make 5-6 percent moves for no reason all the time, that seems to be what you are implying .
"Largely unaffected" does not mean it will be paying the 3% tariffs from India it paid on April 1, assuming that the "White House staffer" isn't just lying about it, like both parties routinely do.
We'll see what gets announced.
large unaffected is from the original 25 percent, they are exempt completely from the new 25 percent given to India today for buying Russian oil.
The latter part is why the stock is moving the way it is.
Shifting production and building facilities takes time. Trump can change his mind and throw a tantrum in five minutes.
Apple won’t be paying any tariff as of right now. Other industries will be. Our view is the most tariffs will be absorbed by more foreign companies as they will need to access American market .
Apple is exempt from some, but not all, and it doesn't look like they're exempt from this one, but that remains to be seen. The absolutel proof will be what happens on the 8th, and the 16th, when the two tranches go into effect.
Would be nice, though.
“While Trump's initial post on social media alluded to India selling oil to Russia…”
Opposite land on display. That is all you need to know about WH expertise in these decisions. And ironically Russia remains free of tariffs.