In a move to mitigate US tariffs, Apple is shifting iPhone production away from China and towards India and Vietnam, with the majority of iPhones bound for the US market set to be manufactured in India. As the tech giant invests $500bn across several US states over the next four years, it aims to reduce reliance on China and navigate the challenges posed by trade turmoil.
The majority of iPhones bound for the US market in the coming months will be made in India, while Vietnam will become a major production hub for items like iPads and Apple Watches. This shift comes as Apple estimates that US import taxes could add about $900m to its costs in the current quarter.
Apple’s chief executive, Tim Cook, has announced plans to invest $500bn across several US states over the next four years. The company is keen to draw attention to these investments and has been urging President Donald Trump to spare key electronics from new tariffs. Despite this, Apple still faces uncertainty as trade turmoil has left its sales unscathed.
Mr Cook stated that India will be the country of origin for the majority of iPhones sold in the US, while Vietnam will become the chief manufacturing hub for items like iPads, Macs, Apple Watches, and AirPods. This move is expected to take time and significant investment, costing billions of dollars.
Shanti Kelemen, chief investment officer at M&G Wealth, noted that while moving production lines to India will be costly, it’s a necessary step for the company. Apple has already made significant investments in the US, and this move aims to reduce reliance on China.
Amazon, another tech giant, has also been navigating the impact of US tariffs. Despite concerns, the company said sales were holding up, rising 8% year-on-year in its North America e-commerce business. The CEO, Andy Jassy, expressed optimism about the firm’s ability to weather challenging conditions.
The shift of Apple’s iPhone supply chain to India and Vietnam marks a significant change in global trade. As companies scramble to respond to Washington‘s trade policies, this move is seen as a positive step towards diversifying supply chains. However, the uncertainty surrounding tariffs remains, and it will be crucial for companies like Apple and Amazon to navigate these challenges effectively.
