In a recent statement, Kevin Hassett, Director of the National Economic Council, clarified that the Trump administration does not intend to harm Apple with tariffs on iPhones. Hassett's remarks came after President Donald Trump threatened to impose a 25% tariff on iPhones manufactured outside of the United States.


Trump’s Threat of 25% Tariff on Apple iPhones

On May 23, 2025, President Trump announced that he expects iPhones sold in the U.S. to be manufactured and assembled in the country, not in India or elsewhere. Trump warned that if Apple’s CEO Tim Cook does not comply, the company will have to pay a tariff of at least 25%.

Earlier, Trump claimed that the U.S. has the workforce and resources to produce iPhones domestically, although no one at Apple supported this statement. Former President Barack Obama had asked the late Apple CEO Steve Jobs about manufacturing iPhones in the U.S., to which Jobs replied at a dinner in 2011, “These jobs aren’t coming back.”

Concerns Over Increased iPhone Costs

Bank of America Securities analyst Wamsi Mohan revealed in April that the iPhone 16 Pro, currently priced at $1,199, could see a price increase of 25% solely due to labor costs. The estimated new cost would be around $1,500. Dan Ives from Wedbush estimated that the cost of an American-made iPhone could rise to $3,500 following Trump’s tariff announcement. Ives also estimated that Apple would need to spend $30 billion over the next three years to move 10% of its supply chain to the U.S.


Hassett on Tariffs and Apple’s Position

Kevin Hassett stated, “If you think Apple has a factory somewhere making a set number of iPhones and must sell them at any cost, then the tariffs will fall on Apple, not the consumers, because it’s an elastic supply.” He emphasized that the administration’s goal is not to harm Apple, but to bring about a fair outcome.

Trump’s threats came after Apple announced a $1.5 billion investment in India, moving some production of iPhones out of China. Trump expressed his dissatisfaction with this move during his recent trip to the Middle East.


Trump’s Focus on Apple’s Supply Chain

In his new book The Capital of the World's Greatest Company, journalist Paul McGee explains how Apple’s massive foreign investments and its involvement in China were key to transforming the country's economy and tech sector. He also mentioned that Apple suppliers like Foxconn have passed on technological knowledge to Chinese competitors like Huawei.

Foxconn, Apple’s iPhone supplier, has faced scrutiny over labor conditions, including a 2011 incident where a series of worker suicides prompted the company to install nets around some of its buildings. Oversight groups have also raised concerns about the exhausting work conditions, with workers being forced to work overtime.


The Complexity of iPhone Manufacturing

Apple’s CEO, Tim Cook, stated in a 2017 interview that another challenge was the lack of skilled American workers. Cook acknowledged that the U.S. doesn’t have enough tool engineers, who work on machines that take sophisticated designs from Apple and transform them into physical products.

In 2017, President Trump announced a $10 billion investment by Foxconn to build factories in Wisconsin. However, the iPhone manufacturer was never officially associated with the Foxconn factory in Wisconsin, but that didn’t stop Trump from claiming that Apple would build three large factories in the U.S.


The Global Supply Chain of iPhones

Despite any efforts to manufacture iPhones in the U.S., Wamsi Mohan pointed out that a significant portion of the components that make up an iPhone comes from countries around the world, which the U.S. has imposed tariffs on. Most iPhones are produced in Asia, with TSMC manufacturing the processor in Taiwan, displays made by South Korean companies like LG or Samsung, and many other components produced in China. Mohan believes that Apple will face tariffs on most of the parts unless it can secure exemptions for individual components.



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