Apple has decided to move most of its iPhone and other product manufacturing for the U.S. away from China. The company made this decision in response to tariffs introduced by President Donald Trump. Apple CEO Tim Cook shared that most iPhones meant for U.S. customers will now be made in India. At the same time, Vietnam will handle the production of iPads, Apple Watches, and other devices.

This shift comes as Apple expects to face around $900 million (£677.5 million) in extra costs this quarter because of U.S. import duties. Although Trump has exempted some electronics from these new tariffs, the financial impact remains high. For years, the U.S. government has been urging Apple to bring manufacturing back to American soil.

India and Vietnam to Gain From Apple’s Strategy

Speaking during a financial update, Tim Cook confirmed that India and Vietnam will take over key production roles. “We do expect the majority of iPhones sold in the U.S. will have India as their country of origin,” he said. Vietnam will manufacture iPads, MacBooks, AirPods, and Apple Watches for the U.S. market. However, Apple will continue using China to produce goods for customers outside the United States.

Apple also used the investor call to highlight its future plans for the U.S. economy. Cook reminded everyone that Apple is planning to invest $500 billion across several American states in the next four years.

Relocating production is not cheap or quick. Apple must invest billions to shift its supply chains and build new facilities. Shanti Kelemen, Chief Investment Officer at M&G Wealth, explained, “Apple has said they want to invest $500 billion over the next few years.” She also mentioned that Apple still faces costs tied to tariffs, even after moving factories.

Tariffs Hit Apple’s Stock

Trump’s policy of “reciprocal tariffs” aimed to push companies to manufacture in the U.S. After the announcement, Apple’s stock dropped. However, some relief came when electronics like phones and computers were temporarily excluded from the tariffs.

Despite these trade issues, Apple’s sales have remained steady. In the first quarter, the company reported a 5% increase in revenue, reaching $95.4 billion. Other tech giants, such as Amazon, also performed well. Amazon reported an 8% rise in North American sales compared to last year.

Companies Stay Resilient Amid Trade Tensions

Apple and Amazon are both adapting to the shifting trade landscape. Amazon CEO Andy Jassy expressed confidence in the company’s ability to adjust, pointing out its success during past disruptions like the COVID-19 pandemic.

Patrick Moorhead, CEO of Moor Insights & Strategy, praised Apple’s move. He called the shift “impressive” and noted that Tim Cook once believed only China could produce iPhones. According to Moorhead, while there's still a long way to go, this is a good beginning.

Apple’s decision to expand manufacturing in India and Vietnam shows how the company is adjusting to global trade changes. It also highlights its focus on building a more flexible and resilient production strategy