Apple should absorb a 25% tariff on U.S. iPhone sales rather than attempt to relocate assembly lines to the United States, according to analyst Ming-Chi Kuo. In a post on X, Kuo called the idea of shifting production “unrealistic” and financially unwise, especially with Donald Trump once again pressing Apple to build iPhones in America.
Trump earlier warned Apple of a potential 25% tariff if it continues producing iPhones overseas, specifically targeting its growing operations in India. But Kuo argued that the financial and operational costs of moving iPhone manufacturing to the U.S. far outweigh the impact of the proposed tariff.
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Apple Faces Political Pressure, Not Just Financial Risk
Kuo emphasized that the specific tariff percentage is not Apple’s biggest concern. The real issue is that this marks Trump’s second direct warning toward Apple in a short span. “That’s a warning sign Apple can’t ignore,” Kuo wrote.
He also suggested that Apple should prioritize delaying or preventing the tariff through political negotiation. One option Kuo mentioned: adjusting internal DEI (diversity, equity, inclusion) policies to secure a temporary pause on new tariffs. While he didn’t detail how that might influence Trump, Kuo sees room for political strategy.
U.S. Manufacturing Not Feasible Before 2029
According to Kuo, bringing iPhone assembly back to the U.S. within a four-year window isn’t possible. Trump also opposes Apple producing iPhones for the U.S. market in India, eliminating Apple’s current go-to alternative. Even if Apple reaches a temporary deal to avoid tariffs, the company would remain exposed to repeated threats throughout Trump’s term.
Analysts at Wedbush previously estimated that building iPhones in the U.S. would take five to ten years and push prices to around $3,500—a commercial dead end.
Apple plans to produce a significant share of its U.S.-bound iPhones in India by 2026. Foxconn is investing $1.5 billion in new facilities near Chennai. Apple’s diversification away from China is clear, but Trump’s threat could disrupt that strategy.
Apple has not commented publicly on Trump’s latest demand. The company’s shares dropped 3% in pre-market trading following the tariff warning.
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