Trump's tariffs shake up the mobile supply chain: US already facing supply problems

For decades, the phrase "Made in China" has become a familiar symbol on any mobile phone. Almost all of the world's major smartphone brands relied on the Asian giant to produce their devices. But Donald Trump's tariffs have dealt a historic blow to this market: in a matter of months, phone imports from that country have plummeted to levels unimaginable until recently. A situation that is reshaping the supply chain for these devices and threatens to cause serious supply problems in the US.

Data from the US Department of Commerce reveal the severity of the blow. While Chinese phone imports remained at normal levels for that time of year in January and February, they began to fall in March and collapsed completely in April : from 7.5 million units in 2024 to just 2.1 million imported in 2025. And preliminary figures for May, yet to be detailed, suggest that the figure has continued to plummet, falling below one million. A gigantic gap in one of the world's main trading partners: in 2024, the US imported 70% of its mobile phones from China, with India and Vietnam trailing behind, and Hong Kong and South Korea as small guests.

Trump's dream was for all those phones to be produced in the US. But reality is stubborn, as he himself acknowledged with his "Trump Phone," and manufacturing in Asia remains the most attractive option for manufacturers. The result is that production hasn't returned to the US, but has suddenly shifted to India and Vietnam. India, in particular, has boosted its production , from around 900,000 units in March and April 2023 to 5.5 million in March of this year and 2.9 million in April.

The explanation makes sense: the outrageous 135% tariff on Chinese imports until May. Since then, the figure has dropped to 30%, but it's still higher than the 10% applied to India and Vietnam. Even with the recent agreement , Vietnamese phones will still bear a 20% tariff, again lower than China's. And it remains to be seen what India will bear, but it doesn't seem very likely to be higher than China's.

The problem is that the relocation of production isn't enough. In March, Indian imports surged to create a buffer, as happened with many other imports. But that buffer quickly disappeared: in April, 4 million fewer phones were imported than in 2024, across all three countries . According to economist Joseph Politano, "phones not manufactured in China are still far from sufficient to offset the deficit" caused by the drop in Chinese exports. If the Asian giant's figures don't recover quickly, the country could face a shortage of smartphones ahead of the all-important holiday season.

Added to this is the added tariff wall erected by Trump. A Berenberg report, published last month, suggests that companies have inventories to last until the end of July. Considering the time it takes to charter a ship from Asia and transport products through the US—between a month and a half and two months—that would force them to place their orders now. And the tariffs they are paying today will soon be felt on the shelves . Both the Federal Reserve and numerous analysts, such as Muzinich & Co, ING, and Berenberg, agree on this, and they already assume that the tariffs will lead to widespread price increases in the US in the coming months. And the telephone sector will not be spared.

And the blame for this problem lies with the business model that has made Apple rich. The company doesn't want to hold inventory, and wants phones to arrive in the US practically hours before they go on sale. To achieve this, it needs its factories to operate every day of the year, producing practically at the rate at which they estimate they will sell out in a couple of weeks. China rolled out the red carpet, building huge cities with factories and supplier plants . The "iPhone city," Zhengzhou, run by its main supplier, Foxconn, has guaranteed constant production for years.

But Foxconn has begun to leave China to avoid a scenario like the current one. In recent years, it has been opening plants in India . And it has taken advantage of this situation to pivot: phones manufactured in India are now almost entirely destined for export to the US; those from China go to Europe. This is a way to avoid the tariffs that many other manufacturers are pursuing.

The result is that phones from China account for a decreasing percentage, and supply chains are becoming more complex : China continues to manufacture parts in its "iPhone City," but now those lenses or cameras travel to India to be assembled. A process that increases costs even further and could end up making India Trump's new enemy.

The other key is that, as much as US Commerce Secretary Howard Lutnick dreams of bringing back "the lines of American workers screwing together iPhones," the labor and parts costs offered by Asian countries are still far below those of the US. But if tariffs on those three countries rise to 20%-30% by the end of summer, when production begins in full swing ahead of the holiday shopping season, the effects on prices could shock shoppers .

The battleground scene to buy iPhones at $3,500 apiece is perhaps not the best way to sell the benefits of tariffs to US citizens.