iPhone Manufacturing Abroad Remains Cost-Effective Despite Tariff Threats

A recent report from the Global Trade Research Initiative (GTRI) highlights that producing iPhones in South Asian regions continues to be significantly more cost-effective than in the United States, even in the face of a potential 25% tariff.

The analysis comes amid recent remarks from former US President Donald Trump, who warned of a 25% import duty on Apple products should the tech giant expand its overseas production. Despite this political pressure, GTRI’s findings suggest that the advantages of offshore manufacturing — including lower labor costs, favorable tax policies, and robust supply chain ecosystems — still outweigh the drawbacks, even with increased trade barriers.

Apple has been steadily diversifying its production base to reduce dependency on a single country and to safeguard operations against geopolitical tensions. The report notes that even if tariffs are implemented, the cost differential between the US and key offshore manufacturing hubs remains substantial.

While tariffs could impact profit margins, analysts believe they are unlikely to fully offset the economic benefits of offshore manufacturing. For companies like Apple, the strategic benefits of a diversified and cost-effective manufacturing footprint continue to support their long-term global production strategies.