US President Donald Trump recently told a group of US governors that Apple CEO Tim Cook planned to move manufacturing operations away from Mexico to the United States, according to Bloomberg. Neither Cook nor Apple has made any public announcement about this plan. Trump said that the Apple chief executive has "stopped two plants in Mexico" and will produce products inside the US.
This news broke just one day after Trump met with Cook, during which the Apple head apparently pledged to spend hundreds of millions of dollars in the US.
After their conversation, Trump spoke to the press on Friday, saying, "He's going to start building."
"Very big numbers — you have to talk to him. I imagine they're going to make an announcement at some point," the US President continued.
Although Trump did not identify which Apple factory was impacted, Bloomberg surmised that it could be a Foxconn factory. Apple does not have a high dependence on Mexico for manufacturing, as the majority of its production is located in Asia. Nevertheless, the company does get some components from Mexican suppliers.
Since Trump's victory in the election last year, Cook has been trying to build bridges with the administration. He initially met the President at his Mar-a-Lago home during the transition and subsequently attended Trump's inauguration in January.
During Trump's first term, Cook used his relationship with the White House to gain exemptions for iPhones from tariffs. The President, however, has since signaled a change of policy, seeking to level broader tariffs across imported items and not granting such exemptions.
While Apple still relies heavily on China for iPhone manufacturing, the company has been diversifying its supply chain by growing operations in India. Apple started assembling the entire iPhone 16 series in India last year and confirmed plans to produce the iPhone 16e variant in India.
Apple currently manufactures approximately 15% of its iPhones in India, and estimates put this number potentially hitting 25% by 2027, as per Financial Times reports of JPMorgan and Bank of America analysts' estimates.
Though Trump's retaliatory tariffs would affect India, it is not clear if it would hugely hamper Apple's production in India.
A Bank of America report, as cited by CNBC, estimated that Apple would have to raise product prices by around 9% to make up for the effect of Trump's tariffs. The report presumes that Apple devices, such as iPhones and iPads, will be subject to at least a 10% tariff.
Notably, President Trump signed a memorandum enforcing ‘reciprocal tariffs’ based on the duties foreign nations impose on the US. Countries using a VAT system, which Trump views as more restrictive than traditional tariffs, will face similar treatment.
Earlier this month, Apple’s stock took a hit after Trump announced a 10% tariff on China, where the majority of Apple’s products are assembled.
Read also| Trump Pledges Reciprocal Tariffs on India and China
