U.S. President Donald Trump doubled the tariff rate charged on products imported into the United States from India on Wednesday, but the increase excludes iPhones produced in the country.
That’s a major relief for Apple, as it shifted production to India to escape Trump tariffs on products brought in from China.
The news pushed Apple’s share price up 5% on Wednesday.
iPhone dodges new Trump tariffs on India
President Trump charges tariffs on a wide variety of products produced in Asia and then imported into the United States with the stated goal of increasing production in America. But there are other goals too — on Wednesday, he doubled the import taxes on India because the country keeps buying Russian oil despite an embargo intended to defund the invasion of Ukraine.
That could have been terrible news for Apple. Nearly all its iOS handsets sold in the United States are now assembled in India, according to a recent statement by CEO Tim Cook. But Trump’s doubling of the India tariff reportedly doesn’t affect Apple because it was already exempt from the previous tariff.
“I’ve been talking with White House officials about this and what I can tell you now is that the way that this executive order was written is that the increase to 50% effectively doubles the reciprocal tariffs that are already set to be at 25%. So because they’re just doubling it, it means the same exemptions continue to remain — semiconductors and all derivative products — will remain exempt from all of those tariffs,” reports CNBC’s Megan Cassella. “So the increase in the India tariff should not impact Apple based on the way this executive order was written.”
A the time of this writing, today’s news had pushed the AAPL share price up 5.4%.
Trump and Apple and India, oh my!
Apple’s answer to the trade war between China and Trump administration is to move production to other countries as much as possible.
“The vast majority of the iPhones sold in the U.S. — or the majority, I should say — have a country of origin of India,” Tim Cook said in late July. “And the vast majority of the products — other products, the Mac and the iPad and the Watch — have a country of origin of Vietnam that are sold in the United States.”
But the strategy would completely collapse if Apple had to start paying a 50% import tax on iPhones brought in from India. Hence the sudden increase in the value of APPL shares when it became clear that wouldn’t happen.
To be clear, Apple can’t completely dodge tariffs. It expects $1.1 billion in tariff-related expenses this quarter alone.
Ed Hardy has been writing full-time about tech for 25 years, and using it for much longer than that. His intro to Apple was a Macintosh Classic II (which he still has), but now he uses a 13-inch iPad Pro as his primary computer. He’s written for NotebookReview, TabletPCReview, and Brighthand, as well as other sites.
