Published: Fri, June 21, 2019
Markets | By Otis Pena

Apple Warns New Tariffs Would Impact iPhones, iPads, Macs

Apple Warns New Tariffs Would Impact iPhones, iPads, Macs

On the same note, a Nikkei report writes about how Apple might have asked its major suppliers to make calculations and assess the financial implications of moving 15-to-30 percent of production from China to Southeast Asia.

An executive with knowledge of the situation said the company sees risks in relying on China even if it resolves the dispute with the US. One option can be to maneuver their manufacturing out of China, which Apple is reportedly exploring.

Those included iPhone assemblers Hon Hai Precision Industry Co (鴻海精密), Pegatron Corp (和碩) and Wistron Corp (緯創); MacBook maker Quanta Computer Inc (廣達電腦); iPad maker Compal Electronics Inc (仁寶電腦); and AirPod makers Inventec Corp (英業達), Luxshare-ICT (立訊精密) and GoerTek Inc (歌爾聲學), the Nikkei cited the sources as saying.

Apple Inc. has sent a letter to U.S. Trade Representative Robert Lighthizer warning that the Trump administration's tariffs on China could harm its ability to compete in the global market.

The countries being considered are Mexico, India, Vietnam, Indonesia and Malaysia.

The US already has 25 per cent duties on more than US$250 billion of imports from China.

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The letter, dated June 17 but made public today, points out that all the iPhone maker's core products are manufactured in China.

Shifting the supply chain for manufacturing to other countries will take time.

"The Chinese have not targeted Apple at all, and I don't anticipate that happening, to be honest", Cook said. And seeing as how the vast majority of Apple devices and accessories are manufactured in China, there's a legitimate concern among investors that the proposed tariffs would either raise the price of Apple products for consumers or force Apple to eat the additional cost.

This is not the only production report about Apple to surface.

Earlier this month, Fitch credit rating agency claimed Apple, Dell Technologies Inc and HP Inc were likely blacklist candidates should China retaliate by blacklisting United States companies over the clampdown on Huawei.

The report stated that over 30 members of Apple's capital expense studies team had been discussing production plans with suppliers and governments along with monetary incentives, which could potentially attract Apple manufacturing.

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