Google to move Pixel production out of Vietnam due to Trump's tariffs
Even though we are amid a tariff pause, that doesn't mean that US companies aren't working hard to shake up their supply chain in an effort to get out from under the baseline tariffs (roughly 10% across the board) that are still in play, the original reciprocal tariffs that might come back after the 90-day pause, and the semiconductor tariff that is supposed to be announced soon.
We all know how the huge triple-digit tax on products imported into the US from China could have resulted in sharply higher iPhone prices. The current exclusion of smartphones from President Donald Trump's tariff policy might save US consumers from shelling out thousands more on an iPhone 17 Pro or iPhone 17 Pro Max. But Trump also has said that there will be no exclusions and he has mused about imposing tariffs on semiconductors imported into the States which would impact all handsets shipped to the United States.
The truth is no one, including Trump, knows how this tariff fiasco will turn out. Besides Apple, Google was also facing a problem with tariffs as well. During the last few years, the Alphabet subsidiary moved Pixel production to Vietnam and India. Earlier this week, The Economic Times reported that Google wants to move production of its smartphone line out of Vietnam and into India, especially Pixel units that are scheduled to be shipped into the US.
To that end, the search giant was reportedly talking with its manufacturing partners Foxconn and Dixon Technologies about relocating some Pixel production to India. Google also spoke with some of its suppliers about having components made in India such as chargers, fingerprint sensors, batteries, and enclosures. Currently, most of the components used to build the Pixel variants made in India are imported into the country.
Google wants to move more production of future Pixel handsets from Vietnam to India. | Image credit-PhoneArena
That's due to the 46% reciprocal tariffs on Vietnamese exports heading to America that are currently on pause. The reciprocal tariff on US imports from India, also on pause, is 26%. That 20 percentage point difference means that if the reciprocal tariffs are reinstated, Google would have to pay higher import taxes on Pixel units made in Vietnam and shipped into the United States than those phones made in India and delivered to the US.
Google, like any US company paying tariffs after importing goods from overseas, could decide to keep its profit margins steady by passing some of the tax increase onto consumers in the form of a price hike.
Google will have to really ramp up its Pixel manufacturing in India if it plans on moving the majority of its production to the country. That's because Google is currently having 43,000-45,000 Pixel handsets assembled per month in India and these units are aimed at the Indian market. That figure is far short of the number of units it will need to build in India to meet rising US demand for the Pixel line, a figure that expects to rise next year with the release of the Pixel 10.
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