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The exemption is a major win for Apple, as it means key products like iPhones, iPads, Macs, Apple Watches, and AirTags won’t face immediate cost pressures from the new tariffs
Trump has repeatedly urged Apple to move iPhone production to the U.S., but that remains a challenge due to the lack of large-scale, skilled manufacturing and engineering labour. China’s infrastructure continues to offer unmatched scale and efficiency.
Apple Inc. has narrowly avoided a major crisis—at least for now. The tech giant was staring at significant disruption due to U.S. President Donald Trump’s new tariffs on Chinese imports, which threatened to impact its supply chain as severely as the COVID-19 pandemic did five years ago. However, in a surprising move, Trump announced exemptions for smartphones and computers, offering Apple a much-needed breather.
The exemption is a major win for Apple, as it means key products like iPhones, iPads, Macs, Apple Watches, and AirTags won’t face immediate cost pressures from the new tariffs. However, the relief may be short-lived. Trump made it clear that this is a temporary measure and that tariffs on electronics could still be on the table as part of a broader plan to reshape U.S.-China trade policy.
Before the exemption was announced, Apple had already been preparing a back-up plan. The company accelerated efforts to shift production to India, where factories are now on track to manufacture over 30 million iPhones annually. That output would be enough to meet a significant portion of U.S. demand—Apple sells about 220 to 230 million iPhones each year, with roughly a third of those heading to the U.S. market.
However, relocating production isn’t easy—especially with the iPhone 17 launch approaching. The upcoming model is set to be primarily produced in China, and any abrupt shift could have driven up costs or pressured suppliers to cut margins. Internally, the company had growing concerns that the tariffs could derail its product launch plans.
Apple also faces another challenge: potential retaliation from China. The company generates about 17% of its revenue from the Chinese market and relies heavily on Chinese manufacturing.
Beijing has previously targeted U.S. firms in response to geopolitical tensions, and it has already banned iPhones for government employees following U.S. restrictions on Huawei. Any further escalation could impact Apple’s operations in China or disrupt its supply chain.
While Apple has started diversifying production to countries like Vietnam, Malaysia, and Thailand—producing items such as Apple Watches and AirPods—a full break from China remains unlikely. Around 75% of Apple’s total revenue still comes from products assembled in the country.
Trump has repeatedly urged Apple to move iPhone production to the U.S., but that remains a challenge due to the lack of large-scale, skilled manufacturing and engineering labour. China’s infrastructure continues to offer unmatched scale and efficiency.
Since the new tariffs were announced in April, Apple and other tech companies have been asking the US government for exemptions. They took extra urgency when trade tensions between the US and China led to 145% on goods coming from China.
The move also gave a potential advantage to its competitor, Samsung, since it doesn’t make phones in China.
The exemption has given Apple a breather for now but since policies can change again, the company might still need to plan for bigger changes to avoid future trouble.
- Location :
Washington D.C., United States of America (USA)
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