Trump to Apple: Make iPhones in the USA or Face 25% Tariffs
President Donald Trump announced on May 23, 2025, that Apple will face a 25% tariff on all iPhones manufactured outside the United States unless the company shifts production back home. The announcement, made via his Truth Social platform, sent shockwaves through the market, triggered a selloff in Apple stock, and reignited the debate over U.S. manufacturing policy.
“I have long ago informed Tim Cook, build iPhones in the U.S.—not India—or pay!” — President Donald J. Trump, Truth Social, May 23, 2025
The move is part of Trump’s broader push to reindustrialize America and reduce dependence on foreign manufacturing, particularly in strategic sectors like technology. But it also raises major concerns for Apple, its investors, and the global economy. The threat doesn’t exist in a vacuum—it comes amid escalating trade tensions with the European Union and ongoing efforts to unwind decades of globalization.
Apple Stock Tanks as Wall Street Reacts
The market wasted no time responding. Within hours of Trump’s statement, Apple’s stock dropped more than 3% in premarket trading as investors weighed the financial implications of a 25% import tariff on its flagship product. iPhones account for over half of Apple’s annual revenue, and the company assembles nearly all of them in Asia—primarily in China and India.
Wedbush analyst Daniel Ives warned that such a tariff would be “an earthquake” for Apple’s supply chain. In his note to investors, Ives estimated that relocating iPhone production to the U.S. could drive up the average retail price of an iPhone to around $3,500, factoring in higher labor, infrastructure, and regulatory costs (Barron’s).
The Dow Jones Industrial Average dropped over 600 points, and Nasdaq futures fell by nearly 400 points, as traders braced for broader trade disruptions. Safe-haven assets like gold surged, and the U.S. dollar slipped amid growing economic uncertainty (New York Post).
Why Trump Is Going After Apple
Trump’s focus on Apple is strategic. The tech giant is not only the most valuable company in the world, but also a symbol of American innovation that—ironically—relies heavily on offshore labor. While Apple has pledged over $500 billion in U.S. investments and announced plans to create 20,000 domestic jobs over the next four years, the company still produces the overwhelming majority of its devices in Asia.
By publicly pressuring Apple CEO Tim Cook, Trump aims to force a realignment of corporate priorities. He is betting that populist messaging and tariff leverage can push corporate America to repatriate manufacturing and reinvest in U.S. workers.
This isn’t the first time Trump has challenged Apple on its supply chain. During his previous term, he frequently criticized the company for outsourcing jobs, but largely stopped short of direct economic punishment. This time, he appears willing to follow through.
“We can no longer allow our most iconic companies to send jobs overseas, rely on adversaries, and then expect American consumers to foot the bill. Make iPhones here, or pay the price.” — Trump campaign advisor (via Wall Street Journal)
Apple’s Supply Chain Dilemma
Apple’s supply chain is one of the most complex and finely tuned in the world. Its flagship product, the iPhone, requires components from more than 40 countries and is assembled in massive facilities in China and India, primarily operated by Foxconn and other partners.
Foxconn recently committed $1.49 billion to expand its operations in India, part of Apple’s ongoing shift away from China due to rising labor costs and geopolitical risks (Barron’s). However, building that same infrastructure in the U.S. would take years and cost significantly more.
According to estimates from the Brookings Institution, moving even 25% of iPhone assembly to the U.S. would require billions in capital expenditure, regulatory approvals, and training for a specialized labor force that currently doesn’t exist in large enough numbers.
Apple is already expected to absorb $900 million in additional costs this quarter just from its existing transition out of China. That figure could balloon under a full-scale shift to U.S. production.
A Tariff Cascade: EU Also Targeted
Trump’s threat to Apple was part of a broader set of tariff announcements. On the same day, the president proposed a 50% tariff on European Union imports, citing “failed negotiations and persistent trade imbalances.” That move is aimed at industries ranging from automobiles to luxury goods and could spark a major trade war with the EU.
The European Commission responded by saying it will “examine retaliatory measures” and expressed concern over what it called “unilateral and hostile trade action by the United States.”
Markets are now pricing in a higher likelihood of retaliatory tariffs, reduced global trade flows, and slower economic growth—conditions that would impact not just Apple but all multinational firms with international exposure.
Can Apple Realistically Make iPhones in the U.S.?
The question at the heart of this debate is simple: Can Apple make iPhones in America? The short answer: not any time soon.
The long answer is more nuanced. Technically, yes—Apple could begin assembling some iPhones in the U.S., as it does with the Mac Pro in Austin, Texas. But scaling that process to produce hundreds of millions of iPhones per year is a different beast entirely.
To achieve this, Apple would need to:
Build or repurpose large-scale facilities
Establish domestic supplier networks
Hire and train tens of thousands of workers
Overcome the U.S.’s higher labor costs and regulatory burden
That’s not impossible, but it’s years away at best—and would likely result in significantly more expensive iPhones.
What This Means for Investors
Investors should view this development through a few key lenses:
Supply Chain Risk Is Now Political Risk Apple’s exposure to geopolitical and domestic policy shocks is rising. Tariffs are no longer a hypothetical—they’re part of active policy negotiations. Investors need to reassess risk models accordingly.
Tech Margins Could Come Under Pressure If Trump follows through on the tariff, Apple may have to eat the cost or pass it on to consumers. Either scenario could hurt margins and reduce demand.
New Opportunities in Domestic Manufacturing Stocks On the flip side, companies tied to U.S.-based manufacturing, automation, and industrial infrastructure could benefit from this reshoring wave. Stocks like Rockwell Automation (ROK), Emerson Electric (EMR), and Generac (GNRC) are worth watching.
Watch Gold and Safe Havens Continued trade uncertainty will likely boost gold, U.S. Treasuries, and defensive sectors as investors hedge against volatility.
Conclusion: A Watershed Moment for American Industry?
Trump’s ultimatum to Apple could mark a turning point in America’s economic trajectory. If enforced, the 25% tariff would force one of the world’s most powerful corporations to fundamentally reconsider its business model. While the feasibility of U.S. iPhone manufacturing remains in question, the political will to push for it is stronger than ever.
For investors, the message is clear: the era of unchecked globalization is over. As tariffs return to the policy spotlight, smart money will look for exposure to domestic supply chains, automation, and companies that benefit from government-driven industrial revival.
Trump’s bet is that Americans will pay more for an iPhone if it means more jobs in Ohio or Texas. Whether that holds true—or backfires economically—remains to be seen. But one thing’s certain: the rules of the game are changing.
