On May 23, 2025, U.S. President Donald Trump, through a post on his social media platform "Truth Social" and remarks to reporters, strongly demanded that Apple manufacture in the United States the iPhones it sells domestically, and made clear his intention to impose an additional tariff of at least 25% if the company fails to comply. This demand is suggested to potentially extend to other smartphone makers such as Samsung, once again bringing significant uncertainty to the global tech industry and supply chains.

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The Trigger: Apple's Shift to India, and Trump's Strong Intentions

The backdrop to this situation appears to be Apple's push to reduce its dependence on China and shift production to India. Apple has long relied on China for the bulk of its iPhone production, but amid escalating U.S.-China trade friction and rising geopolitical risk, it has been rushing to diversify its supply chain. India has emerged as the primary destination for this shift, with Apple CEO Tim Cook indicating last month that the majority of iPhones sold in the U.S. would come to be produced in India. Indeed, the shift to India is proceeding steadily—Foxconn, a key Apple supplier, has announced a $1.5 billion investment plan to expand its manufacturing capacity in India.

President Trump had previously expressed dissatisfaction with these moves. During his Middle East trip last week, he remarked, "I have a little problem with Tim Cook... He's building all over India," and after meeting with CEO Cook, indicated his belief that Apple would increase production within the United States. This latest tariff statement represents a further escalation of that stance.

In his Truth Social post, Trump stated plainly, "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 anywhere else. If that is not the case, Apple will have to pay a Tariff of at least 25% to the U.S." He further told reporters that, "for fairness," the measure would also apply to other smartphone makers such as Samsung, and suggested the tariff could take effect by the end of June.

Why Is a "Made in the USA" iPhone So Difficult? The Realities of Cost, Technology, and Labor

President Trump's demand for a "Made in the USA" iPhone may sound simple and patriotic on the surface, but technology industry experts unanimously agree that realizing it would be extremely difficult.

First, iPhone manufacturing is an astonishingly complex process. The latest iPhone model consists of roughly 2,700 distinct components, supplied by 187 companies across 28 countries worldwide. Of these, 157 suppliers are based in China. Manufacturing and assembling these components from scratch in the United States would require literally astronomical costs and time.

Analyst estimates make this difficulty clear. According to Dan Ives of Wedbush Securities, moving even just 10% of the iPhone supply chain to the U.S. would cost more than $30 billion and take at least three years. Furthermore, investment firm Morgan Stanley has estimated the cost at "hundreds of billions of dollars"—a scale that becomes easier to grasp when considering that semiconductor maker TSMC has already invested $40 billion in the two plants it is building in Arizona.

Manufacturing costs also pose a major obstacle. Labor costs in the United States are far higher than in Asian countries such as China and India. For example, according to 2022 data, the average annual salary for a machine operator in the U.S. was about $43,000, compared with less than $5,000 in Vietnam. In smartphone manufacturing, which involves a great deal of monotonous, labor-intensive work, this gap in labor costs translates directly into product costs. Some analysts estimate that a U.S.-made iPhone could see its price soar to two to three times the current retail price—potentially reaching $3,500 (roughly ¥540,000).

Bloomberg's Mark Gurman flatly stated that "there is no world in which iPhone production moves to the United States," adding that even if it did happen, output would fall dramatically compared to production in China, and prices would skyrocket. This underscores that the scale of iPhone production is on an entirely different level from Apple's potential to manufacture low-volume products like the MacBook in the U.S.

There is also the problem that the United States has an overwhelming shortage of the skilled workers needed for smartphone manufacturing. Years of manufacturing shifting overseas have meant that domestic skill transfer and talent development have not kept pace. The words Steve Jobs reportedly told then-President Barack Obama in 2011—"those jobs aren't coming back"—hint at this structural problem in manufacturing.

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Who Bears the Cost of a 25% Tariff? Market Reaction and the Future for Consumers

The 25% tariff President Trump is threatening to impose would have a direct impact on Apple's earnings—and, by extension, on consumers. Markets reacted immediately to the news, with Apple's stock falling 3% in pre-market trading right after the threat was reported.

Apple already projects that under the current tariff regime, it will bear approximately $900 million in additional costs in just the third quarter of fiscal 2025. CEO Tim Cook has said that forecasting tariff impacts from June onward is "extremely difficult," and if this new 25% tariff is applied, the burden is expected to swell into the billions of dollars.

The question is who will bear this additional cost. Analyst Ming-Chi Kuo has suggested that Apple should absorb the 25% tariff in order to preserve its profit margins—a calculation based on the idea that the tariff would be cheaper than the enormous capital investment required for a shift to U.S.-based manufacturing. However, unlike Trump's past demands that companies like Walmart absorb tariffs, it is not realistic for a company to keep absorbing such massive cost increases indefinitely. Ultimately, the tariff is highly likely to be added to the import price of the product, with the cost passed on to consumers. In other words, American consumers may end up paying more for the very same iPhone.

Apple is also facing sluggish demand in the Chinese market, where it has taken steps such as raising iPhone trade-in values. Against this backdrop, if prices rise in the U.S. market as well, an impact on competitiveness would be unavoidable.

The Widening Trade War Front: A 50% Tariff Threat Against the EU and Global Economic Uncertainty

President Trump's tariff threats are not limited to Apple and Samsung. On the same day, he suggested he might impose a sweeping 50% tariff on the European Union as a whole. He claimed the EU has taken advantage of the U.S. in trade, resulting in an annual trade deficit exceeding $250 billion, and cited the fact that trade negotiations with the EU have "gone nowhere" as his reason. He recommended that this 50% tariff, like the one aimed at Apple, take effect on June 1.

This evokes a resurgence of the trade friction seen during the first Trump administration (2017–2021), when tariffs were imposed on EU products (such as a 25% tariff on steel and aluminum, and a 25% tariff on automobiles). A report from the U.S. Consumer Technology Association (CTA) suggests that if these sweeping tariffs were implemented, prices for a wide range of goods—including U.S. technology products—could rise by as much as 70%, and U.S. GDP could shrink by $69 billion.

Such moves could accelerate a broader restructuring of global supply chains. Semiconductor makers like TSMC have already urged Washington to eliminate tariffs on semiconductors manufactured outside the United States, arguing that tariffs raise the cost of finished consumer products and dampen demand.

Even among experts, there is considerable uncertainty about the legal mechanisms behind President Trump's tariffs targeting "specific companies" or "specific regions." Nevertheless, the threat itself is already having a major impact on corporate strategy and market sentiment.

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The Future of "Made in America"

Whether President Trump's latest tariff threat will end as mere political posturing or be carried out as actual policy is a matter of great importance to the global economy, and to the tech industry in particular.

At the root of this issue appears to be President Trump's strong political conviction about bringing U.S. manufacturing "back home"—but a complex global supply chain built up over decades cannot easily be reshaped by political fiat alone. Particularly for a product like the iPhone, which requires advanced technology and enormous production volumes, it must be said that "fully" domestic production in the U.S. is unrealistic at this point in time, whether measured in terms of cost, technology, or labor.

Apple has invested enormous time and money to reduce its dependence on China and has begun moving to establish India as its new primary manufacturing base. President Trump's latest demand would force a major reversal of that strategy, but given the supply-chain knowledge and investment Apple has accumulated so far, absorbing the tariff is likely to be the more economically rational choice compared to building a new production system in the United States.

If the 25% tariff is actually implemented, it would ultimately affect the purchasing power of U.S. consumers and could act as a factor suppressing demand for iPhones. It would also affect not just Apple but Samsung and other makers alike, likely reshaping the competitive landscape in the U.S. market.

Going forward, it will be worth watching closely how Apple and Samsung respond, and whether the Trump administration follows through on its threat, or instead reaches some form of compromise through negotiation. This episode has once again highlighted one of the most critical challenges in modern management: how global companies should factor geopolitical risk into their business strategies, and how they can strengthen the resilience of their supply chains.

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