Apple is considering moving between 15% and 30% of all iPhone production out of China and has asked its major suppliers to weigh up the costs, a report says. There's no deadline for the move to other countries, and several different markets are being considered for the time being, including Mexico, India, Vietnam, Indonesia, and Malaysia. Among these countries, India and Vietnam are the favourites which makes sense, given with their much lower currency and the amount of labour workforce.
According to the news report, main iPhone assemblers Foxconn, Pegatron, Wistron, major MacBook maker Quanta Computer, iPad maker, Compal Electronics, and AirPods makers Inventec, Luxshare-ICT and Goertek all have been asked to evaluate their options outside China. With the U.S. -China trade war leaving its mark on technology, many U.S. companies are trying to find a way around the 25 percent punitive tax that would generate higher prices for products.
So what do you think of this scenario?
"We urge you not to proceed with these tariffs", Apple's letter said. Apple did not immediately respond to Gizmodo's request for comment Wednesday morning. Tariffs are an import tax that US corporations pay and they decide whether to pass along the costs to consumers.
Some 5 million Chinese jobs rely on Apple's presence in the country, including those of more than 1.8 million software and iOS app developers, according to a study available on the company's website.
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Up till now, Apple has skirted across the Trump administration's tariffs, regardless of its heavy reliance on Chinese manufacturing.
The US and China have already slapped each other with import duties on multiple product categories.
The company, which assembles most of Apple's iPhones, said earlier this month that it has enough capacity outside China to produce all the devices the company sells in the U.S.
"With or without the final round of the $300 billion tariff, Apple is following the big trend [to diversify production]", one person reportedly told Nikkei.
Back in May, China vowed to reciprocate President Donald Trump's plan to hike tariffs on products imported from China, threatening to impose a 25% tariff on USA goods.