Apple CEO Tim Cook announced on Thursday (May 1st) that the majority of iPhones and other devices sold in the United States are being moved out of China for production, with India and Vietnam becoming the main beneficiaries. This decision comes at a time when the US and China are engaged in a tense trade war.
Cook stated that in the coming months, most iPhones sold in the US will be manufactured in India, while Vietnam will become the primary manufacturing center for products like iPad, Mac, Apple Watch, and AirPods exported to the US.
During a quarterly earnings conference call on Thursday, Cook said, “Assuming that the current global tariff rates, policies, and implementations do not change in the remaining time of this quarter, and no new tariffs are added, we estimate that this impact will increase our costs by $900 million.”
According to CNN, financial services firm Wedbush Securities reported that about 90% of the production of Apple’s most profitable product, the iPhone, is completed in China. Cook stated on Thursday that he expects in the future, “the country of origin for most iPhones sold in the US will be India.”
Apple’s significant diversification of its global supply chain beyond China highlights the impact of US President Trump’s tariffs on China. The US currently imposes tariffs of at least 145% on most Chinese goods. Cook noted that despite the Trump administration exempting smart phones and other semiconductor-containing electronic products from equal tariffs on China (125%), Apple’s China-made products still face at least a 20% tariff when exported to the US.
“Our supply chain is very complex. There are always risks in the supply chain,” Cook said. “We realized before that putting everything in one place posed too much risk.”
According to BBC, Patrick Moorhead, CEO of Moor Insights & Strategy, described the shift of the iPhone supply chain to India as “impressive.”
“This is in stark contrast to Cook’s statement a few years ago that ‘only China can produce iPhones’,” Moorhead said. “Apple has a lot to demonstrate in this regard, but it’s a pretty good start.”
Amazon is also repositioning itself to enhance its resilience to tariffs. The company stated that it is working to ensure diversity among sellers on its platform. Amazon’s President and CEO, Andy Jassy, expressed that he feels the company is well-prepared for the coming months, emphasizing Amazon’s scale and its role in supplying essential everyday goods.