Shares of Apple suppliers in China fell on May 26, 2025, following comments from US President Donald Trump regarding potential tariffs on imported iPhones.

On May 24, 2025, Trump indicated that a 25% tariff could be applied to all iPhones purchased by US consumers.

This statement comes as trade tensions between the US and China continue.

Key Apple suppliers in China, including Luxshare, Goertek, and Lens Technology, reported significant declines in their stock prices during trading.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Apple’s supply chain diversification falls short of tariff-proofing

Despite years of efforts to reduce China exposure, Apple remains vulnerable to tariffs with 85% of iPhones still manufactured in China 1.

The company has made significant progress in India, shifting 50% of US-sold iPhones to Indian production and supporting Foxconn’s plans for a new US$1.5 billion factory there 2.

These diversification efforts, however, aren’t enough to fully insulate Apple from tariff threats, as recent statements specifically demand US manufacturing rather than just non-Chinese production 2.

Apple’s predicament illustrates how deeply entrenched global tech supply chains remain in China despite geopolitical pressures, with the company’s 2019 data showing 80% of its products were made in China 3.

Tim Cook’s strategy of cultivating a relationship with Trump, which previously helped secure tariff exemptions, appears less effective now, highlighting the limitations of personal diplomacy in trade policy 1.

2️⃣ The economic impossibility of American-made iPhones

Analysts estimate that manufacturing iPhones in the U.S. would increase retail prices dramatically to between US$1,500 and US$3,500 per device, potentially pricing out many consumers 4.

The proposed 25% tariff alone could add approximately $900 million in costs to Apple’s quarterly results, significantly impacting profit margins in a business where components are sourced globally 4.

Industry experts highlight that for every US$100 price increase on iPhones, sales volume could decrease by approximately 10%, creating a challenging equation for Apple’s business model 5.