Tariff deals: End of the beginning

Last week, American President Donald Trump fired a salvo against Apple Chief Executive Officer (CEO) Tim Cook, demanding that iPhones be made in the United States (US), not India.

- DEBASHIS BASU

This marks a fresh escalation in his "America First" crusade. The outburst, laced with characteristic bluster, came despite Mr. Cook's earlier pledge of $500 billion in US investment. In 2024-25, Apple churned out 40 million iPhones in India, worth $22 billion, with 32 million units ($17.5 billion) exported to the US, Europe, and West Asia. By 2026, the tech giant aims to assemble all US-bound iPhones here, scaling up production to 80 million units annually—a boon for both Apple and India's ambitions as a manufacturing hub. But Mr. Trump's demands threaten to upend this.

It is a reminder that the President's tariff threats are not merely about trade deficits; They are a battering ram for his broader goal of reshoring manufacturing to American soil. This dual agenda—balancing trade while reviving US industry—puts him on a collision course with the long-term strategies of companies like Apple, which has deftly shifted production from China to India, and with nations banking on manufacturing to fuel growth. Reshoring, however, is a far thornier issue than trade negotiations. Targeting Apple publicly is only the first example of Mr. Trump's thinking. Expect trade discussions with other manufacturing heavyweights such as Germany, South Korea, and Japan to be laced with equally contentious demands on reshoring. It will be worse than the trade talks, which themselves have not progressed much.