San Francisco – The iPhone is a typical 21st century product – in California’s creation and design, it is now entangled in the global economy.
Apple manufactures most iPhones in China, but in recent years, the Cupertino-based company has produced more products in India, Vietnam and other countries. Overall, Tech Giant says it will depend on more than 50 countries and regions to put AirPods, iPads and MacBooks in the hands of consumers.
Now, its global supply chain is under siege.
This week, President Donald Trump said on Saturday that he would impose a 10% tariff on baselines on imports from all countries. His administration also added tariffs of 34% on China, 46% in Vietnam and 26% on India.
“There’s no place to hide in Apple,” said Eric Harwitt, professor of Asian Studies at the University of Hawaii, Manoa. “No matter where they make the technology, they will suffer and they will see a higher cost.”
Trump’s sweeping tariffs rattle both investors and the most valuable tech companies that have driven the growth of the world economy and Silicon Valley. They also raised questions about whether these global businesses would pass higher costs to consumers or cut salaries.
Apple is a particularly big hit. The stock fell more than 9% on Thursday and fell another 7% on Friday to close at $188.38.
Stock prices of other high-tech Titans, including Google’s parent companies Alphabet, Meta, Chipmaker Nvidia and Amazon, also fell sharply, with the high-tech Nasdaq Composite falling 5.8% on Friday.
The anxiety reflects concerns among investors that tariffs could cause lasting damage, making it more difficult for the US tech industry to compete globally and dominate the competition to deploy artificial intelligence technology, analysts said.
The product is also expected to reduce the costs of home appliances, including iPhones, as the product becomes more expensive.
“Technology is permeating everyday life, and these tariffs are an attack on household appliances,” said Todd O’Boyle, vice president of technology policy at the industry group The Chamber of Progress. “They are attacking everything we buy, and that includes foreign parts with a global supply chain.”
Taxation could mean that consumers would pay more than $2,500 for their iPhones. This can cost around $1,000 depending on the model.
Apple did not respond to requests for comment.
Meta, Amazon and Alphabet also produce consumer gadgets, but they make billions of dollars each year from advertisements purchased by brands from other countries. If these advertisers pull back their spending, some analysts could fall.
Meta declined to comment, but its annual report states that tariffs or trade disputes could lead to a decline in China-based advertising revenue. The company has also expanded production of mixed reality headsets in Vietnam.
Alphabet, which manufactures mobile phones, earphones, smart speakers and other home appliances, also cites tariffs between manufacturing and supply chain risks that could harm their businesses. Did not respond to a request for comment.
The White House said it is imposing tariffs because it wants to bring more manufacturing jobs back to America.
In his executive order, Trump said relying too much on foreign producers could threaten economic security by “making the US supply chains vulnerable to geopolitical disruption and supply shocks.”
“These first American economic policies have brought about historic job, wages and investment growth in his first term. Everyone from Main Street to Wall Street will thrive again as President Trump secures the future of our country’s economy.”
He cited recent multi-billion dollar commitments made by companies such as Taiwanese semiconductor manufacturers and Apple to build more manufacturing plants in the United States.
The tech industry is seeking more tariffs than what the president called “Liberation Day.”
The Trump administration has already imposed tariffs on certain auto parts and imported aluminum and steel. This is the material used by high-tech companies to build data centers that store and manage computer hardware and equipment.
The administration escaped these materials along with copper from the latest tariffs. Semiconductors, which have also been excluded from what power electronics and AI systems are called “mutual tariffs.”
It is still unclear how technology companies will respond to tariff costs. Trump hopes businesses will return manufacturing to the US, but production can also move production to a location with lower tariff rates. It takes years for businesses to build new factories.
It is also possible that these duties will not remain.
During Trump’s first term, Apple received a tariff exemption from imports from China on several products, including smartwatches. His second term Trump’s tariffs are far beyond China and will affect more countries.
Nickvias, founding director of Randall R. Kendrick Global Supply Chain Institute at USC’s Marshall School of Business, said the Trump administration signaled companies that simply changing production to locations outside of China is not enough.
“Every dollar I open my market for you, I need you open my market for me for me (same degree),” he said.
Some tech companies are trying to bring more manufacturing back to the US
Among them is Nvidia, a chipmaker based in Santa Clara, one of the most valuable companies in the world.
While Nvidia appears to be spared from the brunt of tariffs due to its exemption to semiconductors, some industry observers said more tariffs may still be coming.
When asked to reporters Thursday if the tip tariffs were off the table, Trump told reporters, “Tips will start right away.”
“We manufacture in so many different places. We were able to change things,” Nvidia CEO Jensen Huang said in a Q&A with analysts last month. “Taxes will have a short-term impact on us. In the long run, we will be manufacturing on land.”
In February, Apple said it would invest $500 billion in the US towards a variety of initiatives, including opening a manufacturing facility in Houston.
In its annual report, the company said that “virtually everything” of manufacturing is being done primarily by partners in mainland China, India, Japan, South Korea, Taiwan and Vietnam.
Shifting where your iPhone and other Apple products are made is not easy.
China has engineers who can meet the high-quality specifications of Apple products, while the US doesn’t have many engineers with the same skills, Harwit said.
“What Apple has developed over the years is that level of manufacturing expertise that makes it so difficult for the US to find the skilled workers they need to meet their needs,” he added.
Daniel Ives, managing director of Wedbush Securities, said it would cost Apple three years and $30 billion to move 10% of its supply chain from Asia to the US.
“The chances of Apple and Tech Supply Chain moving to the US are fantasy, fictional stories unless you like a $3,500 iPhone, a $2,500 TV and a $300 AirPods,” Ives says.
