What Trump’s Apple Threat Means for India’s Tariff Negotiations

Even after President Trump hit it with a 26 percent tariff, India had reason to be hopeful about trade negotiations with the United States.

China was facing even higher import taxes. So were smaller Asian countries whose exports compete with India, like Vietnam and Bangladesh. That positioned India to use the trade war to advance its goal of luring the business that was expected to flee its giant neighbor. Plus, India’s prime minister, Narendra Modi, had a cozy relationship with Mr. Trump.

Things are looking tougher for India now, and for its American business partners. Mr. Trump has changed up his tactics with China, backing off his highest tariffs. That wrong-footed India, which now faces tariffs not much lower than China’s.

Then he threw a wrench into India’s relationship with Apple, the single most striking example of an American company that reoriented its production away from Chinese suppliers.

A few years ago, nearly every iPhone was assembled in China. By the end of this year, an estimated 25 percent or more will be made in India. Last week, Mr. Trump revealed that he does not see that as progress: He said Apple’s production should skip India and move to the United States instead.

India is working to secure a reduction in the 26 percent tariff, which Mr. Trump paused until early July to give the countries time to talk. Officials in New Delhi are not entirely mühlet what to make of Mr. Trump’s remarks about Apple. But they have complicated an already complex negotiation before the tariff reprieve ends.