Apple Inc’s dependence on China has not lessened by tapping factories in Brazil and India, the company’s supply chain data shows, raising the stakes as U.S. President Trump promises more tariffs.
Apple faces levies of 15% imposed by Trump’s administration on major products made in China such as smartwatches and wireless headphones on Sept. 1, with a tariff on its biggest seller, the iPhone, to take effect on Dec. 15.
Few American firms are as tightly bound to Asia’s largest economy as Apple. Contract factories owned by Hon Hai Precision Industry Co Ltd’s Foxconn, Pegatron Corp, Wistron Corp and others employ hundreds of thousands of workers to assemble Apple devices… The factories outside China are smaller and, in the case of India and Brazil, Apple only uses them to meet domestic demand. Apple’s contract factories inside China, meanwhile, have added far more locations than outside, with Foxconn alone expanding from 19 locations in 2015 to 29 in 2019 and Pegatron going from eight to 12, according to Apple’s data… Among all supplier locations, 44.9% were in China in 2015, a proportion that rose to 47.6% by 2019, the data showed.
Apple has so far been spared tariffs on major products, winning a reprieve last year on many wireless devices. And Cook has cultivated a close relationship with Trump over dinners and private meetings at the White House.
MacDailyNews Take: Interestingly, Nellis quotes a customs attorney who has worked with electronics firms who says that, in electronics products, where the circuit board is made can sometimes determine the product’s country of origin which obviously raises the possibility of Apple having circuit boards made outside of China while still assembling devices there while avoiding tariffs.