Electronics makers are shifting manufacturing from China in order to side-step Trump administration tariffs…
Even the unseasonable downpour couldn’t dampen the spirits of the executives and officials gathered on the Indonesian island of Batam to cut the ribbon on a new Pegatron Corp factory… This low-key July ceremony to launch a manufacturing outpost marked a critical first step into Southeast Asia for one of Apple Inc.’s most important suppliers. It also encapsulates a fundamental move of electronics production, set in motion by the escalating U.S.-China trade war, that may hurt the world’s No. 2 economy while enriching Southeast Asia and beyond… [as it spurs] an exodus from China of manufacturers.
Some recognize that U.S.-Chinese tensions won’t fade soon, while others are just tired of the uncertainty. In one of the most dramatic responses since Trump first brandished full tariffs, HP laptop-maker Inventec Corp. declared plans to move its entire U.S.-bound laptop operations from China to its home base of Taiwan within months.
Like Pegatron, the makers of the world’s electronics are increasingly rushing out of the way of Trump-administration tariffs on Chinese-made goods. Server motherboard makers for Google and Amazon.com Inc. are already shifting to Taiwan. Even Apple Inc., whose gargantuan Chinese production machine hires more people than any other private employer, is testing the waters. GoerTek Inc., for one, is trying out production of AirPods in Vietnam, people familiar said…
Foxconn will start to churn out iPhones in [India] this year after its print circuit board affiliate and Apple supplier Zhen Ding Technology Holding announced plans to invest there late last year. Luxshare Precision Industry Co., another Apple supplier, is considering moving some production of cables and connectors to India as well, according to people familiar, with one saying Apple made the request to the Chinese company.
MacDailyNews Take: Prime Minister Narendra Modi’s Make-in-India program is showing success as the world’s supply and assembly chains reorganize.
As the pressure ratchets up, it will hopefully ultimately lead to a better balance.
I’m cognizant that in both the U.S. and China, there have been cases where everyone hasn’t benefited, where the benefit hasn’t been balanced. My belief is that one plus one equals three. The pie gets larger, working together. — Apple CEO Tim Cook, March 24, 2018
The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street!
— Donald J. Trump (@realDonaldTrump) June 24, 2018
At least half of the popular fallacies about economics come from assuming that economic activity is a zero-sum game, in which what is gained by someone is lost by someone else. But transactions would not continue unless both sides gained, whether in international trade, employment, or renting an apartment. — Thomas Sowell, June 14, 2006