CNBC’s Martin Soong and Chery Kang discuss Apple’s supply chain strategy, to shift more iPhones production from China to India to avoid U.S. tariffs, and why it’s angering U.S. President Donald Trump.

Uttar Pradesh

Donald Trump has signed an order to impose tariffs imports into the U.S. from countries including China, Mexico and Canada.

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Apple has been shifting production of its iPhones from China to India, with plans to manufacture most iPhones sold in the United States at Indian factories by the end of 2026. This strategic move is aimed at avoiding higher U.S. tariffs on Chinese goods. U.S. President Donald Trump has expressed dissatisfaction with the decision, publicly stating his concerns about Apple expanding production in India rather than bringing jobs and manufacturing back to the United States.

Foxconn, a key supplier for Apple, is also increasing its investment in India. The company has entered a joint investment of $433 million with the Indian HCL Group to construct a chip manufacturing plant in Uttar Pradesh. This facility will produce display driver chips for mobile phones, laptops, automobiles, PCs, and other consumer electronics.

While Apple and Foxconn are not alone in diversifying their supply chains away from China, the shift aligns with a broader corporate trend known as the “China plus one” strategy. Companies are exploring alternatives to Chinese manufacturing due to trade tensions and shifting global policies. However, business analysts note that such transitions come with challenges, including differences in strategic and cultural approaches, as well as regulatory delays. Foxconn previously withdrew from a joint venture in India in 2023, reportedly due to disagreements and delays in receiving approvals from Indian authorities.



Apple's tariff hopping plan angers U.S. President Trump

Apple also in trouble with the president the company has been shifting its production from China to India for iPhones and aims to make most of the iPhone sold in the U.S. at factories in India by the end of 2026 next year and that is of course to avoid a higher U.S. tariffs on Chinese goods but President Donald Trump is not happy about that move lashing out at Apple CEO Tim Cook take a listen to this I had a little problem with Tim Cook yesterday I said to him Tim you're my friend I treated you very good you're coming here with 500 billion dollars but now I hear you're building all over India I don't want your building in India President Trump there expressing his unhappiness with Apple Apple is not the only company by the way shifting its production to India one of Apple's key suppliers Foxconn also known as Hanhi Precision is also moving there and that brings us to our big number of the day 433 million dollars that's the size of Foxconn's joint investment with Indian company HCL Group to build a chip plant in India's Uttar Pradesh now the new facility will manufacture Foxconn's display driver chips used in mobile phones laptops automobiles PCs and other consumer electronics and here we go it's really just thinking about some of these China plus one economies and I think I posed that question to a number of our guests yesterday and many of them were talking about how of course they were talking about the Indian equity side of things and it's really the domestic consumption story that they really like and of course looking at this tariff pause or a cease fire between the U.S. and China does that somehow pause the China plus one strategies by corporates and other businesses I think that is really the key question going forward yeah I think it's a good one Sherry and from the available evidence at least from the Chinese side it seems as though even with this 90-day policy about Chinese corporates not stopping they're continuing to diversify on the U.S. side the whole story about Apple trying to diversify and doing a plus one or rather more I don't know what would that be a plus plus one or plus two because you know what Apple is trying to do is basically you know sort of tariff country hop right can't do it in China okay let's try India now but for the president you know he's saying look no no no Tim can't do that you know I'm making it harder in China you can't just move to India you got to bring the jobs back home and production back home but that is just not gonna happen that beats the purpose of his whole tariff policy and what he's trying to achieve with China and pretty much the rest of the world as well but we will have to see how things go here because specifically for Foxconn they were pursuing a JV in India and they had to pull in 2023. It's not very clear as to why but some reports did suggest that they didn't really see eye to eye when it comes to strategic strategies and cultural approaches and so on of course this is with another conglomerate in India as well and there was a delay in incentive approvals from the Indian authorities as well so does is that going to be a smooth ride from here on for this particular JV that's another thing to watch as well.

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