Apple Inc. (AAPL) is at the center of escalating trade tensions, as former President Donald Trump pushes for domestic iPhone production while ramping up tariffs on Asian imports.
Speaking on Tuesday, White House Press Secretary Karoline Leavitt confirmed that Trump “absolutely” wants Apple to manufacture its flagship devices in the United States.
Investors reacted swiftly. Apple shares sank 2.6% late Tuesday, closing at $176.72. The downturn marks a continuation of sharp declines, with AAPL shedding nearly 23% over five sessions, including a 5.7% drop on Monday. The stock briefly lost its crown as the world's most valuable public company to Microsoft (MSFT), wiping out $773 billion in market capitalization.
Trump’s latest move—a sweeping tariff hike targeting 34% on China, 46% on Vietnam, and 26% on India—sent shockwaves through global tech markets. On Wednesday, he added a 50% retaliatory tariff on Chinese goods after Beijing responded in kind. Analysts from UBS estimate that the iPhone 16 Pro Max could rise by 56% to $1,874 under the new tariff scheme, highlighting the steep costs U.S. consumers could soon face.
Apple’s Supply Chain Scramble and the India Shift
In a bid to sidestep looming tariff costs, Apple has accelerated its production shift to India. According to a Reuters report, the company chartered cargo planes to fly approximately 1.5 million iPhones—about 600 tons—from India to the U.S. The shipments, which began in March, reflect Apple's ongoing efforts to diversify its supply chain away from China.
India now accounts for 20% of iPhone imports to the U.S., though most devices—including high-end models—are still assembled in China by Apple’s longtime manufacturing partner, Foxconn. Wedbush analyst Dan Ives called the tariff environment a potential “Category 5 price storm,” warning that the increased levies could devastate margins and force dramatic price hikes on consumers.
Despite Trump's push, experts remain skeptical that full-scale U.S.-based iPhone production is feasible. Wedbush estimates a domestically assembled iPhone would cost around $3,500—more than triple its current retail price. BofA Securities (BAC) analyst Wamsi Mohan echoed those concerns, noting that sub-assemblies and key components would still need to be imported, even if final assembly shifted stateside.
Policy Whiplash and the Market’s Wild Ride
The chaos hit a temporary pause Wednesday after Trump announced a 90-day tariff reprieve for most countries—excluding China—and hinted at potential exemptions for U.S. companies. Apple stock rebounded sharply, surging 15% to $198.22, its biggest one-day market-cap gain on record. The $397 billion leap brought Apple back to the top of the global market cap leaderboard.
Still, analysts warn that the relief may be short-lived. Jefferies upgraded Apple from “Underperform” to “Hold,” citing the sharp sell-off rather than improved fundamentals. Lead analyst Edison Lee also slashed iPhone shipment forecasts through 2027 and cut the firm’s price target from $202.33 to $167.88, citing softening demand, AI limitations in smartphones, and the threat of a global recession.
Further analysis from New Street Research projected price increases of up to 35% for tech hardware under current tariff conditions. Apple’s reliance on Asia-based manufacturing places it in a vulnerable position as global economic and political uncertainties intensify.
With mounting pressure from Washington and shrinking room to maneuver abroad, Apple is navigating one of the most volatile chapters in its modern history. Whether the company can maintain its profitability—and its place atop the global tech hierarchy—will depend on how it responds to the rapidly shifting geopolitical and economic landscape.
The chaos hit a temporary pause Wednesday after Trump announced a 90-day tariff reprieve for most countries—excluding China—and hinted at potential exemptions for U.S. companies. Apple stock rebounded sharply, surging 15% to $198.22, its biggest one-day market-cap gain on record. The $397 billion leap brought Apple back to the top of the global market cap leaderboard.
Still, analysts warn that the relief may be short-lived. Jefferies upgraded Apple from “Underperform” to “Hold,” citing the sharp sell-off rather than improved fundamentals. Lead analyst Edison Lee also slashed iPhone shipment forecasts through 2027 and cut the firm’s price target from $202.33 to $167.88, citing softening demand, AI limitations in smartphones, and the threat of a global recession.
Further analysis from New Street Research projected price increases of up to 35% for tech hardware under current tariff conditions. Apple’s reliance on Asia-based manufacturing places it in a vulnerable position as global economic and political uncertainties intensify.
With mounting pressure from Washington and shrinking room to maneuver abroad, Apple is navigating one of the most volatile chapters in its modern history. Whether the company can maintain its profitability—and its place atop the global tech hierarchy—will depend on how it responds to the rapidly shifting geopolitical and economic landscape.
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