Apple Races To Boost iPhone Production In India, Vietnam As Trump Pauses Tariffs

President Trump's 90-day pause on his "reciprocal" tariffs for countries that did not retaliate—excluding China—has allowed Tim Cook's Apple to ramp up production of smartphones, tablets, and laptops in India and Vietnam.

Sources familiar with Apple's supply chains told Nikkei Asia that top suppliers in India were instructed to ramp up iPhone production. Yet the people noted that factory utilization rates were already at maximum levels, making it challenging to bring on significant amounts of new production. 

Here's more from the report:

Apple has helped suppliers purchase equipment that could increase iPhone production in India by several million units, one of the people told Nikkei Asia.

The company expects to produce at least 50 million iPhones there this year and is pushing to make the majority of its upcoming iPhone model bound for the U.S. in India.

It has also told suppliers that the majority of MacBooks and iPads for the U.S. market need to be made in Vietnam, sources briefed on the matter said.

Apple also asked suppliers to ship as many components and parts from China as possible to Southeast Asia and India to support the increasing production for a wide range of products for the U.S. market, according to multiple sources familiar with the matter.

The good news for Apple over the weekend is that U.S. Customs and Border Protection issued updated trade guidance on some of the highest-value goods—such as computers, chips, and smartphones—from reciprocal tariffs (though they remain subject to a 20% basic tariff if made in China). However, U.S. Commerce Secretary Howard Lutnick told This Week host Jonathan Karl on Sunday that these consumer devices will be subject to separate tariffs in the coming months.

Last week, Appel scrambled five emergency air freight shipments of iPhones and other products from India and China to the U.S. to avoid the tariff war. 

Trade data via the supply chain platform Sayari shows that Foxconn India is a major iPhone supplier.

Nikkei's report also noted that Apple informed suppliers to "accelerate the shift of component production, such as printed circuit boards, to Thailand and other non-China locations." 

"We are requested to ship all of our components to Southeast Asia and India by air as much as possible. ... It's like the client is scooping up all the inventories to move them outside of China," said an executive with an Apple component supplier, adding that his company will have to shoulder the extra air-shipping costs.

"Apple is very serious about auditing multiple sites in Thailand for component production," a manager at another key Apple supplier told Nikkei Asia. "The accelerating diversification out of China is ongoing."

Meanwhile, Meta, HP, and Dell have also instructed suppliers to increase production in Vietnam and other Southeast Asia countries to avoid China tariffs. The direct result of Trump's trade war is to push the supply chains of US companies out of China and toward friendshoring or re-shoring.