How U.S. Tariffs Boosted Samsung and India's Trade Power

As global trade adjusts to a new trade order shaped since April 2025 by U.S.-imposed tariffs, Samsung and India emerge as unexpected beneficiaries, quietly gaining strategic advantages in global electronics manufacturing and trade.

On April 2, 2025, the U.S. President declared a “reciprocal tariff” strategy imposing a two-tier tariff structure: a baseline 10% tariff on all imports from countries worldwide, excluding Canada and Mexico, and additional country-specific tariffs. China, South Korea, and India were not exempt from these measures. 

However, these tariffs are more than a mere trade battle between countries. Samsung and Apple, two leading smartphone manufacturers worldwide, are involved in a tariff battle, and Samsung might emerge as the winner. 

On April 25, 2025, Apple revealed its plan to move the production of iPhones destined for the U.S. market from China to India by the end of 2026. This marks a significant shift for Apple, which sells more than 60 million iPhones annually in the U.S. However, Apple would need to double its iPhone production capacity in India to diversify its supply chain, reduce reliance on China, and meet the U.S. market demands.

Although Apple has been building and increasing its production facilities and capacities in India for several years, the recently imposed U.S. 147% tariffs on imports from China have only contributed to accelerating the relocation of production to India. 

However, while Apple is still transitioning, Samsung ended its mobile phone production in China and expanded its production capabilities in India and Vietnam. Moreover, in 2020, the South Korean company completed building new production facilities in its factory in Noida, India. It doubled the production capacity from 68 million units to 120 million units annually. By reducing exposure to Chinese manufacturing, Samsung managed to insulate itself from the U.S. tariffs, which targeted Chinese-made electronics. 

Recent developments may further favour Samsung. U.S. President Donald Trump said India is ready to sign a trade deal that proposes no tariffs on U.S. goods. Such an agreement could also positively affect India's exports to the U.S. since reciprocal actions can be expected to be part of the deal.

Nevertheless, since significant portions of Samsung's production are in Vietnam, the verdict on whether Samsung won will also depend on future negotiations between Vietnam and the U.S. and between South Korea and the U.S. 

Make in India

While Samsung and Apple are making strategic moves to reduce production costs and minimize the consequences of a trade war between China and the U.S., India has positioned itself as the next global manufacturing powerhouse. 

In 2014, Prime Minister Shri Narendra Modi launched the “Make in India” initiative to transform the country from a predominantly service-led economy to a manufacturing-driven one. Although the goal to increase the manufacturing sector to 25% of the country's GDP by 2022 has not been met and is currently around 17%, KPMG reports that India is increasingly attracting foreign investments, primarily in electronics, automotive, and renewable energy industries.

The U.S. and China signed an agreement in Geneva, Switzerland, to reduce tariffs, which should not negatively affect India in the long term. The U.S. agreed to lower tariffs on Chinese imports from 145% to 30%, while China reduced tariffs on U.S. goods from 125% to 10%. Despite these reductions, India's strategic positioning and negotiations for favorable trade terms with the U.S. suggest continued growth in its manufacturing sector.

Even the recent U.S. President's criticism of Apple's CEO, Tim Cook, for wanting to move iPhone production from China to India instead of the U.S. should not deter Apple's plans or India's emergence as a key iPhone manufacturing hub.

Trump reportedly told Cook,

"Tim, we treated you very good, we put up with all the plants you built in China for years ... we are not interested in you building in India, India can take care of themselves, they are doing very well, we want you to build here".

However, relocating iPhone production to the U.S. would substantially increase the price of the iPhone, as high as $3,500. This contradicts the motives behind moving production from China to India, which include supply chain diversification and concerns over higher iPhone prices.

The potential for a U.S.-India trade agreement further supports India's role in the new global trade order caused by U.S. global tariffs and the years-long U.S.-China trade war. However, whether India will become a manufacturing powerhouse depends on factors such as production costs, quality control concerns, and component dependence.