The trade war between the United States and China is far from the end. The next company affected by the tension between the two countries will possibly be Apple. With President Donald Trump threatening Beijing with imposing new tariffs on about $300 billion worth of Chinese goods, the giant of Cupertino will have a complicated situation to deal with. After all, the largest part of iPhones is iPads are manufactured by Foxconn in China.
The US tariffs already affected some accessories sold by Apple, however, those hardly have a significant impact on its bottom line. However, if these tariffs start to affect the iPhone’s portfolio Apple could see the sales decreasing in light of the prices being lifted to compensate these tariffs – The end users will suffer from more expensive devices, or Apple will have to take a hit on its profit.
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In response to that problem, a senior executive at the Taiwanese manufacturer Foxconn stated that his company is ready to move the iPhone and iPads manufacture out of China if it is needed. Hon Hai, better known as Foxconn, has been for years a key manufacturing partner to Apple. According to semiconductor division chief Young Liu, “25% of the production capacity is positioned outside of China and the company is ready to help Apple since it has enough capacity to meet the demand of the US market.”
Cupertino hasn’t issued any kind of instructions for moving the production of iDevices, but Mr.Liu added that Foxconn is ready “respond swiftly and rely on localized manufacturing”. Apparently, the executives from the manufacturing company were already prepared for the growing tension between US government and China, after they signed a contract with the US government to open a plant in Wisconsin, USA, providing 2,000 new jobs.
Worth noting that Foxconn also has a factory in Chennai, India, but currently it only runs some tests and isn’t manufacturing actual Apple devices. But there’s Winston, which assembles Apple devices in India, however, they are mostly older models like the iPhone 6S. Google already alerted the US that this silly war will be hurtful for the country, due to Huawei ban and the race for its own operating system. We don’t think that Apple will keep a low profile if this starts to affect their business as well.
