Every iPhone carries a small message: “Designed in California.” But while Apple’s ideas are born in the United States, most of its products are made in China. The iPhone, Apple’s best-selling device, is built with parts made around the world but mostly assembled in Chinese factories. Over 220 million iPhones are made each year. Almost 90% of them are put together in China and then shipped across the ocean to the United States.
That global system now faces serious trouble. President Donald Trump has brought back harsh tariffs on Chinese goods. Some of them are as high as 245%. Apple was lucky last week when smartphones and computers were not included in the latest round. But that relief may not last. Trump warned, “NOBODY is getting ‘off the hook.’” He hinted that new duties could target electronics, semiconductors, and the entire tech supply chain.
Tight Ties, Growing Risks
The US and China still rely on each other, even as tensions rise. Trump’s trade moves have shaken that bond. Now, people are asking: who depends more on whom?
Apple’s long story with China began in the 1990s. Back then, the company sold computers in China through resellers. In 1997, Apple was near collapse. But China’s growing economy gave it a second chance. China welcomed Western companies to boost jobs and growth. Apple jumped at the chance.
In 2001, Apple officially joined the Chinese market. It partnered with a trading company in Shanghai. Then came Foxconn, a Taiwanese firm with giant Chinese factories. Foxconn first made iPods, then iMacs, and finally became the main producer of iPhones. Apple even helped smaller Chinese firms grow. For example, it trained a company called Beijing Jingdiao to make high-quality glass parts.
Apple opened its first official Chinese store in 2008. The same year, China hosted the Olympics. Apple quickly grew to 50 stores across the country. Crowds lined up to buy its shiny devices. Sales soared, and so did the number of workers in Apple’s Chinese factories.
Foxconn’s Zhengzhou factory, often called “iPhone City,” is the world’s largest iPhone plant. Taiwan’s TSMC makes the advanced chips inside iPhones. Many of the rare earth minerals used in the phone’s speakers and cameras also come from China.
Nikkei Asia reported that in 2024, 150 out of Apple’s 187 top suppliers had plants in China. Apple CEO Tim Cook even said, “No supply chain matters more to us than China.”
Tariffs and Pressure at Home
During Trump’s first term, Apple managed to dodge many tariffs. But this time, the White House is using Apple to send a message. The goal is clear: bring production back to the US.
Commerce Secretary Howard Lutnick said, “The army of humans screwing in tiny screws—will now work in America.” White House Press Secretary Karoline Leavitt added that the US should not rely on China for vital tech parts. She said more companies are moving production home.
But some experts doubt this will work. Eli Friedman, a former Apple advisor, called US-based iPhone assembly a “fantasy.” He said Apple explored other options as early as 2013, but never took them seriously. After COVID-19 slowed Chinese factories, Apple turned to Vietnam and India. Still, China remains at the heart of its system.
Any large shift would hit China’s economy hard. Manufacturing jobs still matter a lot there. And working with big brands like Apple brings influence.
In response to US tariffs, China hit back. It raised duties on some US goods to 125%. It also limited exports of key minerals needed in electronics.
Trump has warned that countries helping China will also face tariffs. Vietnam, where Apple now makes AirPods, got a short break—a 90-day delay on a 46% tariff.
Friedman added that moving big factories like Foxconn’s to other countries won’t be easy. Most options are still in Asia and still under US watch.
A New Era of Competition
Apple is also losing ground in China. Local brands like Huawei, Vivo, and Xiaomi now challenge Apple with quality devices. In 2024, Apple lost its spot as China’s top phone brand.
Chinese buyers are also spending less. And Apple’s lack of AI features—like those powered by ChatGPT, which is banned in China—hurts its sales.
In January, Apple cut iPhone prices to get more buyers. But the response has been weak.
Politics adds another layer of stress. Under President Xi Jinping, Apple made changes to fit China’s rules. It limited tools like Bluetooth and AirDrop. The company also faced crackdowns that hurt even local giants like Alibaba.
In a bid to gain favor at home, Apple promised to invest $500 billion in the US. But Trump’s new trade plans may undo that goodwill.
With more tariffs possible, Apple faces a new test. It must balance business in China with pressure from US leaders. Supply chain expert Jigar Dixit says the company won’t collapse, but its choices are shrinking.
Friedman says last week’s exemption gave Apple breathing room. But the bigger storm may still be coming.