Trump’s 50% Tariffs on India: Why Apple iPhones Escape Price Rise

Even as President Donald Trump signed an executive order doubling tariffs on Indian imports to 50%, Apple’s US-bound iPhones assembled in India remain exempt and will continue to enter duty-free.

Apart from iPhones, smartphones and other electronic products are excluded from the reciprocal tariffs.

Trump imposed an additional 25% tariffs on India over its oil trade with Russia. The order, announced on August 6, will come into effect on August 27.

The US President alleged that India’s energy deals were ‘helping Moscow fund its war in Ukraine’ and accused New Delhi of indirectly supporting Russia’s war effort. The fresh 25% tariff raised total sanctions on India to 50%.

However, the relief for iPhones and other electronics may be temporary. Reports suggest the US Commerce Department is reviewing semiconductor-related imports under Section 232 of the Trade Expansion Act, previously invoked to impose duties on steel and aluminum.

Trump has signalled more measures ahead: “No one is getting off the hook,” he said, hinting that specific semiconductor levies could be extended to smartphones in the future.

If exemptions are withdrawn, analysts warn Apple could face higher production costs compared with rivals in Vietnam and China.

India has overtaken China as Apple’s biggest supplier to the US. Counterpoint Research data shows 71% of iPhones sold in the US between April and June were made in India, compared with 31% a year earlier.

Reports state Foxconn exported $3.2 billion worth of iPhones from India between March and May, with 97% shipped directly to the US.

Apple shifted production to India after supply chain disruptions in China during the Covid-19 pandemic. Today, India accounts for over one-fifth of Apple’s global iPhone output, making it the core of Apple’s US supply chain.

If exemptions end, iPhones made in India could become costlier worldwide, forcing Apple to rethink its pricing strategy.

The company has indicated it may absorb added costs or pass them on gradually through telecom contracts, resulting in ‘a few extra dollars on monthly plans rather than a sharp upfront hike.’