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Apple is shifting more of its iPhone production to India to avoid the high tariffs the US government recently placed on Chinese goods.
These tariffs, introduced by President Trump, have significantly raised the cost of importing iPhones made in China, where most are currently built.
The Wall Street Journal reports that Apple hopes to reduce the financial impact of these new rules by assembling more iPhones in India, where the tariffs are much lower.
This move is seen as a short-term solution while Apple tries to get an exemption from the tariffs, something CEO Tim Cook was able to do during Trump’s first term.
Apple still depends heavily on its Chinese factories and isn’t ready to make a complete shift, as the situation is unpredictable and complex.
The new tariffs increase Chinese goods by at least 54%, compared to 26% for Indian products. If the trade conflict worsens, costs could go up even more.
The iPhone is Apple’s most important product, generating around half of its revenue. So, anything that increases the cost to make it, like tariffs, is a significant concern.
Following the announcement of these tariffs, Apple’s stock dropped sharply, losing 19% in just three days.
To help cushion the blow, Apple may send all 25 million iPhones it plans to produce in India this year to the US, which would meet about half of the American demand.
If iPhones from China are hit with full tariffs, the cost of an iPhone 16 Pro could jump by $300, pushing the cost of making one from $550 to $850.
However, building iPhones in the US isn’t a realistic fix either, as experts say it could lead to iPhones costing as much as $3,500.
Since 2017, Apple has been gradually building more iPhones in India, helping it reduce dependence on China and avoid Indian import taxes for local sales.
While Apple is also increasing manufacturing in the US and sourcing chips from Arizona, China remains the core of its operations.
What do you think about these new tariffs and Apple’s moves? Do you think Apple should manufacture the iPhone in the US? Tell us below in the comments, or via our Twitter or Facebook.
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