Stock Price Plunges 20% Over Last Three Trading Days
"Production in India Is a Temporary Measure... Dependence on China Remains"
Apple is expected to expand the supply of iPhones produced in India to the United States. In response to the reciprocal tariffs announced globally by U.S. President Donald Trump, Apple plans to increase the proportion of India-made iPhones, which have lower tariffs than Chinese products, to reduce tariff burdens.
On the 7th (local time), the Wall Street Journal (WSJ) reported, citing sources, that Apple plans to source more iPhones from India to the U.S. to avoid high tariffs on Chinese products.
President Trump announced on the 2nd that a 34% reciprocal tariff would be imposed on China. Adding the existing 20% tariff, Chinese products imported into the U.S. will face a total tariff of 54%. Furthermore, President Trump warned that if China does not withdraw its retaliatory tariffs, an additional 50% tariff will be imposed. In contrast, the tariff rate on Indian products is 26%, which is lower than that on Chinese products.
In particular, for the iPhone 16 Pro, tariffs on Chinese products could add $300 to the hardware cost of $550. Therefore, importing iPhones from India, where tariffs are about half of those in China, could reduce losses for Apple.
Apple has been assembling iPhones in India in cooperation with partners since 2017 and is expanding production from older models to the latest ones. According to Bank of America, Apple plans to produce about 25 million iPhones in India this year.
Wall Street pointed out that although Apple is attempting to diversify its supply chain, its dependence on China remains excessively high. Dan Ives, an analyst at Wedbush Securities, diagnosed that Apple faces greater risks from President Trump's trade war than other big tech companies. He said, "The tariff economy triggered by President Trump is a complete disaster for Apple," adding, "No American tech company is as negatively affected by these tariffs as Apple." He further noted, "90% of iPhones are still produced and assembled in China," and "The short-term impact of the tariff war on Apple's overall profits will be unimaginably large."
The WSJ also reported, "Apple's production base is still concentrated in China," and "(This change in the supply chain) appears to be a short-term temporary measure by Apple in response to President Trump's tariff policy. Apple views the current situation as too uncertain to change its long-term supply chain plans."
Due to this analysis that Apple has not escaped its high dependence on China, Apple’s stock price on the U.S. stock market closed at $181.46, down 3.67% from the previous trading day. Following sharp declines of 9.2% on the 3rd and 7.29% on the 4th, the stock has fallen more than 20% by this day. Its market capitalization also decreased to $2.725 trillion, narrowing the gap with second-ranked Microsoft ($2.66 trillion).
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