Trump’s ‘America First’ Push On Apple Could Drive Up iPhone Costs For US Consumers, Say Experts

<p>US President Donald Trump&rsquo;s renewed push for iPhones to be manufactured within the country is expected to increase the price of the devices for American buyers, due to a combination of elevated tariffs and significantly higher production costs, industry analysts said on Friday.</p>
<p>According to Neil Shah, Vice President of Research at Counterpoint Research, shifting Apple&rsquo;s manufacturing operations to the United States in the near or medium term is highly unrealistic. Apple&rsquo;s existing supply chain is deeply rooted in Asia, particularly in countries like China, India, and Vietnam. &ldquo;It&rsquo;s not just about Foxconn opening a factory in the USA but also the supply chain has to relocate closer to the USA, which is beyond question,&rdquo; Shah noted. Even if Apple starts assembling devices in the US, production costs could rise by 10 to 20 per cent, effectively cancelling out the impact of a 25 per cent tariff, he added, reported PTI.</p>
<h3>Apple’s Global Supply Chain: A Complex Ecosystem</h3>
<p>Trump recently emphasised his expectation that iPhones sold in the US be manufactured domestically. &ldquo;I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25 per cent must be paid by Apple to the US,&rdquo; Trump wrote on Truth Social. He has previously voiced disapproval of Apple increasing production in India.</p>
<p>Data from the Global Trade Research Initiative (GTRI) illustrated the complexity of iPhone production. While Apple claims approximately $450 per unit (on a $1,000 iPhone) for its brand, design, and software, other countries also contribute significant value. US companies such as Qualcomm and Broadcom add around $80, Taiwan contributes $150 for chip manufacturing, South Korea supplies $90 worth of OLED screens and memory chips, and Japan adds about $85 primarily via camera systems. Germany, Vietnam, and Malaysia collectively contribute another $45, while India&rsquo;s share stands at $30 per device&mdash;most of which is offset by production-linked incentive payments.</p>
<p>Labour cost differences are a major barrier to US-based production. Assembly workers in India earn approximately $230 per month, while wages in states like California could push monthly labour costs up to $2,900. This would raise assembly costs from $30 to nearly $390 per device. Without significant price hikes, Apple&rsquo;s per-unit profit would drop from $450 to around $60, said GTRI Founder Ajay Srivastava.</p>
<p>He argued that if assembly moves away from India, the country would have to evolve beyond basic assembly and invest in core component manufacturing, such as displays, chips, and batteries. &ldquo;The cost to Apple’s margins is real&mdash;but so is the gain in domestic employment, economic rebalancing, and supply chain resilience. Even India, once the dust settles, may benefit by being pushed toward deeper, more valuable manufacturing,&rdquo; Srivastava added.</p>
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<h3>India&rsquo;s Growing Role in Apple’s Manufacturing Plans</h3>
<p>Shah also highlighted that outside of China, India remains Apple&rsquo;s most promising manufacturing base. The country offers competitive advantages, including skilled English-speaking labour, a strong software ecosystem, pro-manufacturing policies like the PLI scheme, and a large domestic market. He also suggested that the US pressure on Apple might be part of a larger strategic play to gain negotiation leverage, knowing India&rsquo;s strong interest in having global giants like Apple bolster its electronics manufacturing ambitions.</p>
<p>Apple CEO Tim Cook had previously indicated that the majority of iPhones sold in the US during the June quarter would be sourced from India, while China would continue to supply most devices for other global markets. iPhones produced in India are assembled at Foxconn&rsquo;s facility in Tamil Nadu, with Tata Electronics, which operates Pegatron Corp&rsquo;s Indian unit, also playing a key role. Both Foxconn and Tata are actively expanding their operations and production capacity to increase output.</p>
<p>In the financial year ending March 2025, Apple assembled 60 per cent more iPhones in India, valued at around $22 billion. Additionally, Foxconn has begun producing Apple AirPods in Telangana for export markets. S&amp;P Global data revealed that iPhone sales in the US hit 75.9 million units in 2024, while India exported 3.1 million units in March alone, indicating the need for a further ramp-up either via expanded capacity or diverted domestic shipments.</p>
<p>Despite the uncertainties triggered by Trump&rsquo;s tariff threats and shifting policy landscape, Apple is carefully navigating its strategy between cost pressures and political demands. &ldquo;Apple finds itself once again in the crosshairs of a belligerent ‘America First’ policy stance&mdash;navigating the tightrope between inflationary pressures and absorbing costs. While the tariff see-saw is likely to continue, planting more seeds for US manufacturing, India’s role as a critical cog in Apple’s global supply chain will only grow stronger,&rdquo; said Prabhu Ram, Vice President at Cyber Media Research.</p>