Introduction to the Topic

President Donald Trump has called on Apple to manufacture iPhones for the American market domestically. In a post on Friday morning, the president explicitly warned that he would recommend a 25 percent tariff be applied to any iPhones sold in the United States that were manufactured outside the country.

The President’s Warning

"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% must be paid by Apple to the U.S.,” the president wrote. His reference to India was in response to reports that Apple has been considering shifting all US-bound iPhone production to India in order to avoid trade instability with China brought on by tensions.

Apple’s Production Plans

Apple trialed low-volume iPhone production in India in 2017 with the iPhone SE. The company began assembling more phones in India throughout subsequent years and now plans to expand production. During the company’s most recent earnings call, it was stated that the majority of iPhones sold in the US during the coming quarter would be sourced from India.

Managing Relationships with the Trump Administration

Apple has been careful in managing its relationship with the Trump administration, announcing investments in the United States that align with the president’s goals, and announcing plans to "open" a manufacturing facility in Texas that had actually been producing Mac Pros for years. Apple CEO Tim Cook also donated to the president’s inauguration fund and attended the event.

Potential Costs of Manufacturing in the US

Analysts have said that an iPhone made in America could cost upwards of 25 percent more from increased labor costs alone. Labeling a product as "Made in the USA" requires meeting certain standards, and it’s uncertain whether Apple could meet that standard without drastically increasing the cost of its products. This article originally appeared on Engadget at https://www.engadget.com/big-tech/trump-threatens-25-percent-tariff-on-iphones-manufactured-overseas-155728995.html?src=rss