What just happened? Donald Trump has given Apple an ultimatum: build iPhones in the US or pay a tariff of at least 25% on its handsets made outside of the country. The president has long been pushing for a US-made iPhone, despite such a device being a near-impossibility and potentially costing a fortune.

“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump wrote in a post on his Truth Social platform earlier today. “If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.”

During a business event in the Middle East last week, Trump said he had a “little problem” with CEO Tim Cook over Apple moving more iPhone assembly duties to India. Trump added that following a discussion with Cook in Riyadh, Apple would be “upping their production in the United States.” Cook met with Trump again at the White House on Tuesday.

Apple first started producing iPhones in India in 2017. The initial focus was on low-cost models, but the country started assembling flagship lines in 2023.

BREAKING: Apple stock, $AAPL, falls -4% as President Trump says iPhones must be built in the US or they will face a tariff of at least 25%. pic.twitter.com/anyxsdNxjx

– The Kobeissi Letter (@KobeissiLetter) May 23, 2025

With the introduction of the China tariffs – which have been lowered from 145% to at least 30% on most goods – Apple put even more focus on India for its iPhone assembly. Cupertino aims to move all assembly of iPhones destined for the US market from China to India by the end of 2026.

Moving iPhone manufacturing to the US is easier said than done. New models consist of around 2,700 different parts, and Apple uses 187 suppliers in 28 countries, all but 30 of which are located inside China. Around 90% of Apple’s iPhone production and assembly is currently based in the Asian nation.

There’s also the problem of having enough production sites making iPhone components in the US to meet demand, fewer workers with the required skills compared to China, and the wage differences: US machine operators made an average of $43,000 annually in 2022, while the same profession in Vietnam made less than $5,000 annually. It’s also a job that can be hard, monotonous, and depressing, leaving questions over how many Americans would want to take them.

Even if Apple could somehow move the entire process of iPhone manufacturing to the US, doing so would likely take many years, and several economists warn it could lead to iPhones selling at up to three times their current prices.