Trump Threatens 25% Tariff on iPhones Made Outside the U.S., Sending Apple Shares Lower

President Donald Trump on Friday, May 23, 2025, issued a stark ultimatum to Apple Inc., demanding that the company manufacture iPhones intended for the U.S. market within the United States or face a 25% tariff on devices produced abroad. The announcement, made via Trump’s Truth Social platform, immediately rattled financial markets and sent Apple’s stock down by 2.5% in premarket trading.

Trump’s Message and Rationale

Trump’s statement was direct: “I have long ago informed Tim Cook of Apple that I expect their iPhones 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 former president’s threat comes as Apple continues to diversify its manufacturing operations, shifting significant iPhone production to India in response to previous U.S.-China trade tensions.

Trump has repeatedly expressed frustration with Apple CEO Tim Cook over the company’s strategy to expand manufacturing outside the U.S., particularly in India. During a recent trip to the Middle East, Trump voiced his displeasure about Apple’s plans to sell U.S.-bound iPhones assembled in India.

Market and Industry Reaction

The immediate market reaction to Trump’s announcement was negative, with Apple’s shares dropping 2.5%, contributing to a broader decline in U.S. stock index futures. Analysts warn that such tariffs could significantly raise the price of iPhones for American consumers, with some estimates suggesting that a U.S.-made iPhone could cost as much as $3,500 due to higher labor and production costs. This could severely impact Apple’s sales and profit margins.

Apple has not yet issued an official response to the tariff threat. The company has been actively shifting production to India and Vietnam in recent years to mitigate risks from U.S.-China trade disputes and to diversify its supply chain.

Legal and Economic Uncertainty

It remains unclear whether Trump has the unilateral authority to impose a tariff specifically targeting a single company like Apple. Historically, tariffs are applied broadly to categories of goods from specific countries rather than individual corporations. Nonetheless, Trump’s threat reflects his ongoing efforts to pressure U.S. companies to bring manufacturing back home, a central theme of his trade policy.

Broader Trade Context

Trump’s warning to Apple coincides with broader trade threats, including a proposed 50% tariff on all imports from the European Union, as negotiations with the bloc have stalled. The administration’s approach has drawn criticism from economists and trade experts, who argue that such measures could disrupt global supply chains and increase costs for American consumers and businesses.

Outlook

The potential imposition of a 25% tariff on iPhones manufactured outside the U.S. marks a significant escalation in Trump’s ongoing campaign to reshape global trade and manufacturing. The move places Apple, one of America’s most valuable companies, at the center of a heated debate over globalization, supply chains, and the future of U.S. manufacturing. As the situation develops, both the tech industry and consumers will be watching closely for Apple’s response and any further policy actions from the Trump administration.