Rise Or Fall? Apple Stock Reaction To Trump's 'Not In India' Statement For iPhone Manufacturing

The world's largest smartphone company, Apple Inc's stock price trade in a narrow range on May 15th after US President Donald Trump's bold statement of not producing iPhones in India. Apple has, over the past few years, changed its course from China to India, with the latter accounting for 15% of global output.

Apple plans to increase its iPhone manufacturing foothold in India, and that seems to be an eyesore for US 47th President Donald Trump, who has recently warmed up to its decade-old competitor China.

At the time of writing, Apple's stock price traded at $211.82 apiece, which was near its day's high of $212.96. The performance is broadly flat. In the early trade, Apple's stock dropped by a little over 1.3% to hit an intraday low of $209.54 apiece, compared to the previous session's print of $212.33 apiece.

There was a cautious tone; however, the downfall was limited. Notably, in five sessions, Apple stock is up by 6-7%.

Trump's Not In India Statement:

During a press conference, US President Donald Trump revealed a little problem with Apple's chief Tim Cook.

As per Trump, he told Cook, "You are coming up with $500 billion but now I hear you are building all over Indi." Adding Trump said, "I don't want you building in India."

"You can build in India if you want to take care of India because India is one of the highest tariff nations in the world, so it is very hard to sell in India," Trump told, as per reports.

Then Trump claimed that India had offered US a deal, where they have agreed to charge US literally no tariffs.

Trump shunned Cook during the conference, saying his administration is treating him really well and USA puts up with all the plants that Apple built in China for years. He added, "We are not interested in your building in India. India can take care of themselves."

India's Reply To Trump's Statement On iPhone Manufacturing:

On Trump's claim of India offering zero tariff deal, Dr S. Jaishankar, Minister of External Affairs told media, that nothing is decided yet. He told such trade negotiations takes time and are complicated.

Further, Jaishankar added, that any trade deal should benefit mutually. "It has to work for both countries," he said.

Firmly, Jaishankar said, India is expecting the same from any trade deal. Until that is done, Jaishankar added, "any judgement will be premature."

US reciprocal tariff is about 26% on India. Experts predict that India could increase its import from the US to protect its exports to the USA.

Data from Kotak Institutional Equities revealed that India's exports to the US are around 19% of its total exports, while its imports from the US are around 6.6% of its total imports. Imports from the US are dominated by energy, gems and jewellery, electronics and transport. The US would likely want India's imports to increase in agricultural goods (unlikely India will agree), commercial aircraft, defence goods, electronics, machinery, etc.

Noteworthily, Trump's bold statement comes ahead of India's Union Commerce Minister Piyush Goyal's visit to Washington on May 17. He is visiting with a senior Indian delegation. Massive expectations of critical trade talks between Piyush and US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick.

Goyal is visiting the USA for four days.

Apple's Response To Trump:

Although Apple Inc. has not released any statement. But as per India TV News, Apple's senior official said, "Apple has said that its investment plans in India are firm and it proposes to continue to have India as a major manufacturing base for its products."

Apple shifted its focus to manufacture iPhones from India in 2017. Indian production of iPhones commenced with the low-cost model iPhone SE. Till now, Apple has produced its flagship models like the iPhone 12, iPhone 13, iPhone 14, iPhone 14 Plus and iPhone 15 in India.

iPhones are manufactured in Tamil Nadu by Foxconn and Tata Electronics. Foxconn is the primary manufacturer of iPhones for Apple.

Showing its resilience, the Union Cabinet led by Prime Minister Narendra Modi on May 14th approved the establishment of a semiconductor unit and this time in Uttar Pradesh. The plant is designed for 20,000 wafers per month. The design output capacity is 36 million units per month. This is expected to attract investment of Rs 3,700 crore.

One of the reason why Apple shifted its focus to India is to reduce its reliance on China. Additionally, the tariff tension between the US and China could have caused Apple significant losses.

After Trump's so-called Liberation Day on April 2nd, the US and China entered into a tit-for-tat tariff war. The tensions were so high that Trump increased the US reciprocal tariff to 145% on Chinese goods, and Beijing retaliated with a 125% tariff on US goods. At one point, Trump slapped a 245% tariff on China. Just as fear of recession and global uncertainties sent investors jittery, the US and China were talking about a possible resolution to the trade deal.

Recently, the US and China have agreed upon a 90-day trade deal. Trump brought down reciprocal tariff to 30% from 245% on China, while the latter reduced its duties to 10%. Even still, the tariff on India is lower than the US reciprocal tariff on China.

Last month, Apple announced its plan to invest over $500 billion in the USA over the next four years.

"We are bullish on the future of American innovation, and we're proud to build on our long-standing U.S. investments with this $500 billion commitment to our country's future," said Tim Cook, Apple's CEO on April 25.

Cook added that time, "From doubling our Advanced Manufacturing Fund to building advanced technology in Texas, we're thrilled to expand our support for American manufacturing. And we'll keep working with people and companies across this country to help write an extraordinary new chapter in the history of American innovation."

About Apple Inc:

Apple leads the world in innovation with the iPhone, iPad, Mac, AirPods, Apple Watch, and Apple Vision Pro. Apple's six software platforms - iOS, iPadOS, macOS, watchOS, visionOS, and tvOS - provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay, iCloud, and Apple TV+. Apple's more than 150,000 employees are dedicated to making the best products on earth and to leaving the world better than we found it.