The imposition of tariffs by former U.S. President Donald Trump prompted inquiries about the potential impact on iPhone prices. However, the export of Apple iPhones from India has continued without any apparent effects due to the tariffs. The Trump administration had previously provided an exemption on reciprocal tariffs for electronic goods, encompassing smartphones and computers. This exemption facilitated the duty-free entry of Apple’s semiconductor-powered devices, including the iPhone, into the U.S. market from India. This move brought relief to Apple and other tech companies like Nvidia.
Apple is currently opting to absorb any potential additional costs, rather than curtailing its expansion in India. Experts suggest that the risk of a 50 percent tariff shouldn’t be overlooked. If this were imposed on iPhones, it could significantly impact Apple’s pricing strategies in major markets, potentially driving up costs.
While the current tariff exemptions protect iPhones, the situation is subject to change. The use of Section 232 to impose tariffs on steel and aluminum has already impacted common items. Experts caution that the same powers could extend to smartphones.
India has evolved into a pivotal manufacturing hub for Apple, not just a substitute for China, particularly for iPhones designated for the U.S. market. The company’s strategic position is strong, and its future success will hinge on the policies of the U.S. government, specifically whether it maintains the current exemptions or implements new tariffs.
Data from Counterpoint Research reveals that a substantial 71 percent of iPhones sold in the U.S. between April and June were manufactured in India, a considerable increase from 31 percent a year prior. Additionally, data accessed by Reuters indicates that Foxconn exported approximately $3.2 billion worth of iPhones from India between March and May, with the majority, around 97 percent, being shipped to the U.S.
During Apple’s second-quarter earnings call, CEO Tim Cook confirmed that iPhone production remained at the previously announced levels, indicating a continued shift towards production in India for the U.S. market.