To lessen the impact from the tariffs that U.S. President Donald Trump is putting in place this month, Apple will import more iPhones to the U.S. from India, reports The Wall Street Journal.
The 26 percent tariff on goods imported from India will be less of a hit to Apple's bottom line than the 54 percent tariff on goods from China, the 46 percent tariff in Vietnam, or the 36 percent tariff in Thailand.
Apple does not plan to make major changes to its supply chain because the tariff situation is "too uncertain." Sourcing more U.S. iPhones from India will offset the cost of the tariffs in China, and Apple is viewing that as a short term solution while it attempts to persuade Trump into giving its devices an exemption. Apple CEO Tim Cook was successful getting Apple devices exempted from tariffs during Trump's first term, but he has had less luck so far this time around.
Apple has been working to ramp up manufacturing in India for the last several years, and it will make 25 million iPhones in India this year. By redirecting iPhones made in India to the U.S. market, Apple can meet approximately 50 percent of U.S. iPhone demand in 2025.
While Trump has set tariffs on Chinese goods at 54 percent, he said today that he would increase them if China does not remove the 34 percent reciprocal tariff that it announced on Friday.
Over the weekend, a report from The Wall Street Journal suggested that the current tariff on goods from China could increase Apple's component cost for the iPhone significantly. An iPhone 16 Pro that costs Apple $580 now, for example, could cost $850 with tariffs.
Trump is pushing for companies like Apple to make their devices in the United States, but that is not feasible because it is more affordable for Apple to pay the tariffs than to attempt to move manufacturing to a country that does not have the number of skilled workers available for the kind of advanced fabrication that Apple requires.
Apple earlier this year announced plans to spend $500 billion on U.S. manufacturing, with the company aiming to create Apple Intelligence servers and other similar products that have lower demand.
Apple could employ other strategies to deal with the tariffs, including pressuring suppliers for lower prices and absorbing some of the cost, but it is quite possible that Apple will raise its prices in the near future.
Trump's tariff plans have caused stocks to drop significantly over the course of the last three days, with Apple stock down nearly 20 percent since last Wednesday.
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