US President Donald Trump has announced reciprocal tariffs affecting 57 countries, directly impacting the smartphone industry, including major brands like Apple, Samsung, Motorola, Google, and numerous Chinese suppliers.
United States has already extended the implementation of the reciprocal tariffs by 90 days due to expected negative impact.
Vietnam faces a 46 percent tariff, heavily affecting Samsung, which produces over 60 percent of its smartphones there. China now faces a 104 percent tariff, severely impacting Apple, Motorola, Google, and other brands reliant on Chinese production.
These tariffs are expected to raise smartphone prices in the US and reduce consumer demand, with varying brand-level impact depending on their manufacturing geography, a Counterpoint Research report said.
Apple, with higher margins, may absorb some of the increased costs in the short term. Around 20 percent of US-bound iPhones were produced in India in 2024, which now faces a 26 percent tariff and may benefit from production shifts. Apple’s ability to expand Indian production depends on its diversification strategy, local partner readiness, investments, and policy support.
India is facing a 26 percent tariff on exports to the US, lower than the 46 percent imposed on Vietnam and the steep 104 percent on China. In 2024, India contributed 20 percent of iPhones supplied to the US, positioning it as a strong candidate for production shifts aimed at cost reduction.
However, expanding capacity in India will depend on Apple’s willingness to diversify quickly, the technological maturity of Indian EMS partners, available capital investments, support from ongoing government schemes, and India’s ability to negotiate effectively with the US.
According to Counterpoint’s Vice President Neil Shah, while India is the most viable alternative —followed by Brazil — expanding production will take time. Uncertainty around future tariffs, especially after the sharp rise in China’s, complicates planning. Shah emphasized that India’s success as a production hub will hinge on its ability to align key factors and strengthen its position at the negotiation table.
Samsung is better positioned to adapt quickly due to its large manufacturing base in India, which has spare capacity, and the potential to increase exports from South Korea if favorable negotiations succeed.
Samsung, though minimally reliant on China for production — limited mostly to mid-tier models via Chinese ODM partners — is well positioned to manage the impact of the new tariffs more effectively than others.
With Vietnam now facing a 46 percent tariff, Samsung is expected to shift production swiftly due to its significant manufacturing capacity in India, including one factory with scalable excess capacity. According to Counterpoint’s Research Director Tarun Pathak, this flexibility gives Samsung an advantage in responding to the tariff changes. Additionally, successful negotiations by the South Korean government with the US could boost exports of Samsung’s premium models from South Korea, further easing the impact.
Motorola may pivot to Brazil, which faces the lowest tariff at 10 percent, and India, where it can tap into expanding EMS partnerships. Google and other growing OEMs may also explore India for future manufacturing, though short-term adjustments remain challenging.
Motorola, despite its heavy reliance on Chinese ODMs and international EMS partners, is in a relatively stronger position due to its ability to shift production to Brazil, which faces the lowest tariff at 10 percent and is one of its major markets, as well as to India by leveraging local EMS partners.
According to Counterpoint’s Research Director Jeff Fieldhack, although the new tariffs were sudden, OEMs had likely anticipated them. However, relocating production bases requires substantial investment and time, making short-term relief unlikely, while long-term shifts could still be subject to future tariffs.
Smartphone brands experiencing strong growth, like Google with its Pixel phones, may explore moving production to India depending on partner capabilities.
Brands heavily tied to the Chinese ecosystem, especially those serving US carriers and prepaid markets, will be hit hardest, creating space for both existing players to grow and new entrants to emerge.
Baburajan Kizhakedath
