Apple is facing a $3 trillion loss and a potential shutdown of iPhone production lines as the United States, under President Donald Trump, hits 180 countries with new trade tariffs yesterday, just as he promised.
The company has been trying to move production out of China to places like India and Vietnam, but now those fallback countries are also being hit.
According to Trump, China will now face a 34% tariff, stacked on top of an existing 20% rate—bringing the total to 54%. India is getting a 26% tariff slapped, and Vietnam is seeing a 46% rate.
Tariffs choke every major country Apple depends on
Apple still assembles around 90% of its iPhones in China, mostly through Foxconn, and 80% of the company’s total production relies on Chinese manufacturing, based on estimates from Evercore ISI.
A Tuesday note from Bernstein said China also provides 40% of Apple’s suppliers globally. While Apple had previously reduced its presence in China between 2017 and 2020, Bernstein confirmed that manufacturing numbers have bounced back hard since then.
It’s not just iPhones. Evercore ISI said Apple builds 55% of its MacBooks and 80% of its iPads in Chinese factories. That makes China not just important, but critical.
To avoid this problem, Apple spent the past two years building up operations in India. In 2023, one government minister said Apple wants to make 25% of all iPhones globally in India. But that never fully materialized.
Evercore ISI estimates that only 10% to 15% of iPhones are being assembled in India right now. Bernstein analysts said that number might reach 15% to 20% by the end of 2025—if Apple gets the chance.
Vietnam was also a key part of Apple’s backup plan. Evercore ISI said 90% of Apple watches and other wearables are assembled in Vietnam, along with 20% of all iPads. But now that Vietnam’s facing a 46% tariff, Apple is blocked there too.
Malaysia, which is slowly becoming a bigger site for MacBook assembly, now faces a 25% tariff. Thailand, which handles a smaller portion of Mac production, is hit with a 36% tax. Apple also depends on components from Japan, South Korea, Taiwan, and the United States, which often ship parts between each other before final assembly. That entire process is now more expensive and more complicated.
Europe and China push back as pressure builds on Trump
Outside of Asia, Europe is also ready to push back. On Thursday, Robert Habeck, Germany’s acting economy minister, said during a press conference that Trump will “buckle under pressure” if enough countries stand together.
“That is what I see, that Donald Trump will buckle under pressure, that he will correct his announcements under pressure, but the logical consequence is that he then also needs to feel the pressure,” Habeck said in a statement on Wednesday after the fact.
He said Europe should work with other nations and treat this like an economic “arm wrestle.” Habeck warned against trying to please Trump, saying:
“Allowing Trump to persist or trying to appease him would not be a successful strategy under any circumstances.”
Olaf Scholz, who’s finishing his term as German chancellor, also spoke out against the tariffs. He said Trump’s decision was “fundamentally wrong” and called it an “attack on the global trade order.” Scholz said the U.S. government is making “poorly thought through decisions” and that the path Trump is on “will only lead to losers.”
In China, government officials responded immediately. The Ministry of Commerce told the U.S. to “immediately cancel” its new tariff policies and said it would take “resolute counter-measures” to protect its own interests. One official reportedly called Trump’s move a “typical unilateral bullying practice” and said “many countries have expressed strong dissatisfaction and clear opposition.”
Cryptopolitan Academy: Coming Soon - A New Way to Earn Passive Income with DeFi in 2025. Learn More
