So, what will people in the rest of the world buy then? There won't be new iphones for years, and foxconn will continue to make phones for other manufacturers, whose sales will go up.

What scenario is there that Apple couldn’t make phones in China and every other manufacturer could?

Obviously because Apple is a US company and every other major smartphone company is Asian and has a very different relation to China

Besides Samsung and Apple most of the top cell phone makers are Chinese.

http://www.mobilecellphonerepairing.com/top-mobile-phone-man...

In a trade war, those phones won’t be making it to the US.