Former Cisco (CSCO) CEO John Chambers is no stranger to China’s extensive, efficient tech supply chain.
He was one of the first tech CEOs to tap the country for production of routers and other internet plumbing in the mid-1990s.
But Apple (AAPL) could profitably make iPhones in the US amid high Chinese tariffs from the Trump administration.
“The answer is yes, yes, and yes,” Chambers said on whether Apple CEO Tim Cook could pull off the move.
On April 9, the Trump administration announced a 90-day pause on all reciprocal tariffs except for those on goods from China. Tariffs on one of the US’s most important trading partners now stand at 145% — a 125% reciprocal tariff and the 20% Trump previously levied.
A 10% across-the-board duty is still being applied to all other imports.
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The administration further refined its tariff plans on April 11.
The White House issued a rule that spared smartphones, computers, semiconductors, and other electronics from reciprocal tariffs, especially the harsher tariffs on Chinese goods. US Customs and Border Protection said the goods would be excluded from Trump’s 10% global tariff and the 125% reciprocal Chinese tariffs. However, a 20% fentanyl tariff on Chinese goods still applies.
The administration said it’s eyeing a tariff on semiconductors.
For Apple, the tariff policy could drive up prices on products such as iPhones, Macs, and AirPods, experts say. That could stunt demand and continue to weigh on Apple’s stock, which is down 22% year to date.
As of 12:26:39 PM EDT. Market Open.
To circumvent a major tariff blow, Apple is reportedly eyeing India to make a large chunk of its products.
“If you look at the most strategic partnership to the US over this next decade, it will be India,” said Chambers, who counts Prime Minister Narendra Modi as a longtime personal friend.
“So I think you will see iPhones being made in India, less in China, and you’ll see iPhones being made in the US and strike the balance on it. So I think this is one where you will see us get very close to key allies. I think the most important strategic partnership we have in the world is with India, and I think you’ll see them lay the groundwork for a good working relationship in resolving the tariff issues effectively.”
Apple pledged in February to invest $500 billion in the US, mostly tied to a new manufacturing facility in Houston to pump out servers that support Apple Intelligence. Absent from the commitment was anything related to making consumer hardware in the US.
