US President Donald Trump warned on Friday that Apple would have to pay a 25% tariff if the iPhones sold in the United States were not made inside the country. This warning caused Apple’s shares to drop 2.5% in premarket trading and also lowered the US stock index futures.

Trump said on his social media platform, Truth Social, “I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else.” He added, “If that is not the case, a tariff of at least 25% must be paid by Apple to the US.”

It is not clear if Trump has the power to put a tariff on one company alone. Apple did not immediately reply to Reuters when asked for a comment.

Apple has been increasing its phone production in India as an alternative to China. This is because of the tariffs that Trump placed on Chinese goods. These tariffs have caused worries about supply chain problems and higher prices for iPhones.

Reuters reported last month that Apple is making most of its iPhones sold in the United States in India. The company said that in the June quarter, most smartphones sold in the US would come from India.

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