Trump upends India's tariff strategy

Apple and India have invested years and billions of dollars in teaming up against China. India sees it as a strength. To US President Donald Trump, it looks like leverage in trade talks, writes Alex Travelli from New Delhi

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Even after President Donald Trump hit it with a 26% tariff, India had reason to be hopeful about trade negotiations with the United States.

China was facing even higher import taxes. So were smaller Asian countries whose exports compete with India, like Vietnam and Bangladesh. That positioned India to use the trade war to advance its goal of luring the business that was expected to flee its giant neighbour. Plus, India’s prime minister, Narendra Modi, had a cozy relationship with Trump.

Things are looking tougher for India now, and for its American business partners. Trump has changed up his tactics with China, backing off his highest tariffs. That wrong-footed India, which now faces tariffs not much lower than China's.

Then he threw a wrench into India’s relationship with Apple, the single most striking example of an American company that reoriented its production away from Chinese suppliers.

A few years ago, nearly every iPhone was assembled in China. By the end of this year, an estimated 25% or more will be made in India. Last week, Trump revealed that he does not see that as progress: He said Apple's production should skip India and move to the United States instead.