Several years prior to Donald J. Trump’s entry into politics, Apple, together with its partners, established extensive factories throughout China to assemble the iPhone. Trump’s presidential campaign began by promising his supporters that he would compel Apple to manufacture those products domestically.

Nearly a decade later, the situation has changed little. Rather than shifting manufacturing back home, Apple has transferred production from China to India, Vietnam, and Thailand, with approximately 80% of iPhones still being made in China.

Despite enduring pressure over the years, Apple’s business remains heavily reliant on China, making it impossible for the tech giant to operate without it. After actions taken by the Trump administration, the risks associated with Apple’s operations have prompted concerns for the world’s most valuable publicly traded companies. Significant efforts to relocate Apple’s production to the US would require immense collaboration between the company and the federal government.

Just four days after President Trump announced tariffs on 145% of Chinese exports last month, Apple saw a decline of $770 billion in its market capitalization. The company recouped some of these losses after the President granted a temporary reprieve to Chinese appliance manufacturers.

On Thursday, Wall Street analysts are anticipating a 4% increase in Apple’s most recent quarterly report. This surge comes as consumers rushed to purchase iPhones before the tariffs took effect. The report will provide an opportunity for analysts to question Apple CEO Tim Cook regarding future tariffs, price hikes, and potential risks in both China and the US.

An Apple representative declined to provide executives for interviews for this article. The company announced plans to invest $500 billion in the US over the next four years and will commence manufacturing artificial intelligence servers in Houston by 2026.

“The scrutiny is warranted as they are most at risk from a complete breakdown between the US and China,” stated David Yoffie, a Harvard Business School professor who has authored a case study on Apple.

Gene Munster, managing partner at Deepwater Asset Management, which invests in emerging technology firms, estimates that a total breakdown in relations between the US and China could diminish Apple’s value by more than half. Even if a third of sales moves production to alternate countries, a significant portion of that revenue still relies on products manufactured in China, potentially reducing a $3.2 trillion company to a $1.6 trillion entity. Additionally, if Apple loses sales to Chinese consumers, similar to rival Samsung during the South Korea-China conflict, the value could plummet to $1.2 trillion, especially considering that Beijing has already discouraged government officials from purchasing iPhones.

A substantial decrease in Apple’s value would create significant ripples throughout the stock market, as the company accounts for around 6% of the S&P 500 index. This implies that for every dollar invested in the fund, approximately six cents would be allocated to Apple stocks, leading to a potential halving of returns for investors and the majority of 401(k) holders.

Apple’s connections within China run deep. Decades ago, the company collaborated with Beijing to establish manufacturing operations in China without needing to create a joint venture with local firms, a requirement faced by many US companies. This groundwork allowed Apple to assemble devices affordably in China and sell to the rising middle class, resulting in over 80% of global smartphone profits and generating $67 billion in annual sales in the region.

Over time, Apple’s relationships with China have only strengthened. Today, not only are most iPhones manufactured in China, but Chinese suppliers also produce components for devices made in India and create parts and AirPods in Vietnam.

Apple’s dependence on China has transformed the supply chain into a Rorschach test for the Trump administration. Apple wields more power than any other technology company and achieves its management objectives effectively. The company produces more smartphones than anyone else, invests heavily in components, and significantly impacts the operational landscape of its suppliers.

The Trump administration is hopeful that Apple will initiate a shift. During an interview in April, Commerce Secretary Howard Lutnick remarked, “A workforce of millions is assembling the screws that make iPhones — similar operations will come to America.”

However, pressure on Apple to exit China may prove counterproductive. New tariffs could compel Apple to increase iPhone prices or diminish its smartphone profits. Samsung’s devices, manufactured in Vietnam and exempt from Chinese tariffs, could become cheaper as a result. This could lead to reduced competition in the domestic market, a scenario that Trump is reluctant to embrace.

Apple has resisted the notion of manufacturing iPhones and other devices in the US, as its operations team concluded it would be unfeasible, according to two individuals familiar with the discussions who spoke on condition of anonymity. Ten years ago, finding dependable workers to procure screws and assemble Mac computers in Texas proved challenging.

In China, Apple’s suppliers can recruit around 200,000 workers, who operate in factories monitored by thousands of engineers with extensive manufacturing experience. Many reside in dormitories close to iPhone factories, where components move along the assembly line spanning distances longer than a soccer field.

Wayne Lam, an analyst from TechInsights, states that many employees and seasoned engineers have found it nearly impossible to replicate this in most American cities. He asserts that Apple must develop more automated processes using robotics to compensate for the lower population in the US.

Lam estimates that if Apple were to establish operations in the US, it may have to charge around $2,000 for an iPhone (currently about $1,000) to sustain its existing profit margins. Prices could fall to $1,500 in the future as the company mitigates employee training costs and component production expenses.

“In the short term, it’s not economically viable,” Lam remarked. He also noted that shifting device production back home after nearly 20 years would seem impractical and may complicate the introduction of new products to consumers.

Apple has demonstrated a willingness to adjust its supply chain when adequately incentivized. In 2017, the company began the process of manufacturing an iPhone in India due to elevated import taxes that would inflate prices, hindering their ability to capture market share in the world’s fastest-growing smartphone sector.

Currently, Apple sells approximately 20% of its iPhones globally in India and also produces several components, including metal frames there. However, they still depend on Chinese manufacturers for assembling displays and other intricate parts.

Matthew Moore, a former manufacturing design manager at Apple, emphasized that India offers an advantage the US lacks: “engineers are plentiful everywhere.”

Moore argues that in order to attract Apple and other electronics firms to the United States, the Trump administration must invest in education for science, technology, engineering, and math degrees. Additionally, he believes that there should be incentives for loans towards new manufacturing facilities and affordable housing through Fannie Mae and Freddie Mac.

Last month, Apple temporarily benefitted from a delay. Cook, who has personally donated $1 million to Trump’s inauguration, lobbied the administration for the exemption that spared iPhones and other electronic devices from the 145% tax on Chinese imports. However, this reprieve is temporary, as the administration plans to implement more targeted tariffs on high-tech products.

Without governmental investment, Apple and smaller manufacturers will continue their production in China, as they possess the surplus equipment and engineering staff necessary, according to Moore.

“I don’t believe the ship has sailed; however, it is unrealistic to expect them to manufacture an iPhone here,” Moore commented. “This will require a decade.”