Most US-Bound iPhones Will No Longer Be Made in China, Says Apple

Apple CEO Tim Cook told investors in a second quarter earnings call that the company will import the bulk of its phones for the American market from India.

Apple CEO Tim Cook at an event at Apple Park in Cupertino, Calif., on March 8, 2022. Brooks Kraft/Apple Inc./Reuters

Most iPhones and other Apple products bound for the American market will no longer be made in China, Apple CEO Tim Cook said on May 1.

The majority of the iPhones heading for the United States in the coming months will be made in India, while Vietnam will be the main production point for products such as iPads and Apple Watches.

During a call with investors discussing the tech giant’s second-quarter results, Cook was asked about how the company planned to adapt to the new U.S. tariff regimen, which significantly targets Chinese-manufactured goods.

“For the June quarter, we do expect the majority of iPhones sold in the U.S. will have India as their country of origin and Vietnam to be the country of origin for almost all iPad, Mac, Apple Watch, and AirPods products also sold in the U.S,” Cook said.

Trump has imposed a 145 percent tariff on Chinese goods shipped into the United States, which experts say would have increased the cost of iPhones and other Apple products.

However, the White House provided temporary exemptions to a range of electronic devices and components imported into the United States last month.

Cook said that China would “continue to be the country of origin for the vast majority of total product sales outside the U.S.”

“We have a complex supply chain. There’s always risk in the supply chain,” he said. “What we learned some time ago was that having everything in one location had too much risk with it.”

He also said Apple has started to create a stockpile of products so that the majority of its devices sold in the United States this quarter will not come from China.

The tech giant currently makes more than 90 percent of its products in China.

Cook also said that he predicted a hit to the company’s gross margins, saying that for the next quarter ending in June, “assuming the current global tariff rates, policies and applications do not change for the balance of the quarter and no new tariffs are added, we estimate the impact to add $900 million to our costs.”

However, the CEO said that so far, the ongoing tit-for-tat tariff tumult had not impacted Apple’s sales, and customers had not been rushing to purchase products to beat the impending impact of U.S. tariffs.

The company said that sales and profit for the second quarter ending March 29 were $95.36 billion and $1.65 per share, respectively, compared with analyst estimates of $94.68 billion and $1.63 per share, according to London Stock Exchange Group data.

The outlook for the Cupertino-based company could worsen going forward, however, as although electronics have so far been exempted from import tariffs, Washington has signaled that levies could be imposed in the coming weeks.

Trump said in a Truth Social post on April 13: “We are taking a look at Semiconductors and the whole electronics supply chain in the upcoming National Security Tariff Investigations. What has been exposed is that we need to make products in the United States, and that we will not be held hostage by other Countries, especially hostile trading Nations like China, which will do everything within its power to disrespect the American People.”

On the same call, Cook discussed $500 billion worth of investment inside the United States, telling investors the company would be “expanding” its teams in its “facilities in several states, including Michigan, Texas, California, Arizona, Nevada, Iowa, Oregon, North Carolina, and Washington.

“And we’re going to be opening a new factory for advanced server manufacturing in Texas,” he said.

Apple shares fell by nearly 3 percent in premarket trading on Friday in the wake of the quarterly results being released.