As Donald Trump escalates his trade war with China, Apple is now looking toward India as a key manufacturing hub for its flagship iPhone models, according to a Wall Street Journal report.
The move comes just days after Trump threatened an additional 50% import tax on Chinese goods following China’s announcement of 34% retaliatory tariffs on US imports, which are set to kick in on April 10.
Apple Responds to Rising Costs by Diversifying Production
Facing steep tariffs and unpredictable trade policies, Apple is ramping up iPhone shipments from India to the US as a short-term workaround. This strategy allows the company to avoid Chinese duties while it seeks exemptions from Trump’s new policies.
A senior Indian official revealed to TOI that Apple flew five full shipments of iPhones and other products from India and China to the US in just three days at the end of March. These units were delivered before the new tariffs took effect, ensuring that Apple’s US inventory remains steady for the coming months.
Why India?
Apple has been building its production base in India since 2017, starting with older iPhone models and later expanding to newer versions. Manufacturing in India helps Apple:
- Reduce reliance on China
- Avoid import tariffs in the Indian market
- Capitalize on India’s growing smartphone demand
The current shift is part of a broader diversification strategy as the tech giant reassesses its global supply chain in light of the volatile US-China trade landscape.
Apple Shares Take a Hit
Apple’s exposure to China has raised serious concerns among investors. With the iPhone contributing nearly 50% to Apple’s revenue, the threat of tariffs has caused a 20% drop in Apple’s shares, marking their worst three-day decline in 25 years.
This plunge signals Wall Street’s unease with Apple’s current dependence on China and the potential for rising costs and disrupted supply lines.
Trade War Escalates
Trump’s tough stance on China includes:
- April 2: 26% reciprocal tariffs on countries like India and China
- April 8: Warning of 50% additional tariffs if China doesn’t reverse its retaliatory hike
- Talks underway with Japan and Israel, causing further global uncertainty
With tensions mounting, companies like Apple are left to scramble for alternatives, and India is emerging as a vital player in the global tech supply chain.
