How Trump’s trade war with China turned India into America’s new iPhone manufacturing unit, and why 25% tariff threat may not stop it

Apple‘s manufacturing associate Foxconn shipped almost all iPhones exported from India to the United States between March and May, sending 97% of the $3.2 billion price of units to American customers because the tech big scrambles to navigate President Donald Trump’s escalating trade war with China.The dramatic shift marks an entire reversal from 2024, when solely half of India’s iPhone exports went to the US, with the rest distributed to European markets together with the Netherlands, Czech Republic and Britain, in keeping with Reuters evaluation of customs knowledge. Foxconn’s India-to-US iPhone shipments have already reached $4.4 billion within the first 5 months of 2025, surpassing your entire 2024 complete of $3.7 billion.

Chinese smartphone exports plummet as provide chains shift

Chinese smartphone exports to the US plummeted 72% to underneath $700 million in April, Bloomberg knowledge reveals, marking the bottom ranges since 2011. Meanwhile, China’s telephone part exports to India roughly quadrupled over the previous yr as producers shifted remaining meeting operations.Apple has invested closely in Indian manufacturing capability, with Foxconn growing a $1.5 billion Chennai plant and lobbying to cut back customs clearance occasions from 30 to 6 hours. Tata Electronics, Apple’s second Indian provider, now ships 86% of its iPhone manufacturing to the US, up from 52% in 2024.The trade tensions spotlight Apple’s delicate balancing act between avoiding punitive tariffs and sustaining cost-effective manufacturing, as the corporate traditionally relied on China for 80% of its annual 220 million iPhone models bought globally.

Apple defies Trump’s 25% tariff threat on India manufacturing

Although, Apple doesn’t appear to stop its efforts in India regardless of Trump’s threat of placing “at least 25%” tariffs on Indian-made iPhones, except manufacturing strikes to the United States. “We are not interested in you building in India,” Trump informed CEO Tim Cook in May, demanding home manufacturing whereas Chinese-made iPhones face 55% tariffs in comparison with India’s baseline 10% charge.The standoff displays broader tensions as Trump pushes for home manufacturing whereas Apple pursues cost-effective alternate options to Chinese manufacturing. Apple has pledged $500 billion in US investments over 4 years and CEO Cook personally contributed $1 million to Trump’s inauguration fund, but the corporate continues increasing Indian operations. Trump’s tariff threats additionally prolong to Samsung and different smartphone producers, with the President warning that levies might take impact by the top of June.Industry analysts anticipate India-made iPhones to account for 25-30% of world shipments in 2025, in comparison with 18% final yr. However, consultants warn that totally home US iPhone manufacturing stays unrealistic, with estimates suggesting a “Made in America” iPhone might price $3,500 on account of provide chain complexity.