President Donald Trump and Apple CEO Tim Cook are no longer getting along because Cook wants to make an iPhone in the United States.
Last week, Trump said he “had a little problem with Tim Cook.” On Friday, he said in a social media post that he would put a 25% tax on iPhones.
Because Apple wants to get most of its iPhones from factories in India instead of China, Trump doesn’t like this plan. Cook revealed this plan earlier this month when they talked about earnings.
It is important for Trump that Apple make iPhones in the United States. He has kept putting pressure on the company and Cook.
Trump wrote on Truth Social on Friday, “I told Tim Cook of Apple a long time ago that I expect their iPhones that will be sold in the United States of America to be made and built in the United States, not India or anywhere else.”
Analysts said it would likely be smarter for Apple to take on the extra cost rather than bringing production back to the US.
Apple supply chain analyst Ming-Chi Kuo wrote on X, “In terms of making money, it’s much better for Apple to take the hit of a 25% tariff on iPhones sold in the US market than to move iPhone assembly lines back to the US.”
David Vogt, an analyst at UBS, said that the news of possible 25% tariffs was “jarring,” but that they would only be a “modest headwind” for Apple’s earnings, lowering yearly earnings by 51 cents per share compared to what was expected to be 34 cents per share given the current tariff situation.
An iPhone made in the United States has been thought to be impossible or very expensive for a long time.
CNBC reported that analysts said iPhones made in the U.S. would be much more expensive, with figures putting the price at anywhere from $1,500 to $3,500. Certainly, the cost of labor would go up.
But it would also be hard to make it happen.
Building supply chains and factories takes years because you have to hire people and put in tools. Apple may also have to pay taxes on parts that it brought into the US to put together.
In 2017, Apple started making iPhones in India, but it wasn’t until recently that the country was able to make Apple’s newest products.
Wedbush analyst Dan Ives wrote in a note on Friday, “We believe the idea of Apple making iPhones in the US is a fairy tale that is not possible.”
Other experts were not sure how Trump’s threat would turn out in the end. Even though Apple and the government aren’t getting along very well, they might be able to work out a deal or go to court to fight the taxes.
As of now, most of Apple’s most important products are not subject to tariffs because Trump waived tariffs on phones and computers in April, even from China. However, Apple is not sure how the tariffs will affect their goods after June.
Wells Fargo analyst Aaron Rakers wrote, “We’re skeptical” that the 25% tax will happen.
For Apple to keep its 41% profit margin on iPhones, he wrote, the company could raise prices in the US by $100 to $300 per phone.
It’s not clear how Trump plans to go after Apple’s iPhones made in India. Rakers wrote that the government could put certain taxes on phones that come from India.
Apple’s business in India keeps growing.
The Financial Times reported Thursday that Foxconn, the company that puts together iPhones for Apple, is building a new $1.5 billion plant in India that could make some iPhones.
Apple didn’t say anything about Trump’s post.
