Apple iPhones for the USA can be made Outside China, Says Foxconn

Lloyd Doyle
June 12, 2019

US President Donald Trump recently threatened to move forward with a plan to impose tariffs on about US$300 billion worth of additional goods from China after having increased the tariff rate on more than US$200 billion worth of Chinese goods from 10% to 25% last month.

As it stands, China remains a very important part of Apple's supply chain.

"Twenty-five percent of our production capacity is outside of China and we can help Apple respond to its needs in the USA market", said Liu, adding that investments are now being made in India for Apple.

However, Apple hasn't requested such a transfer of production capacity from China to other markets, he said, albeit Hon Hai is ready to "respond swiftly" if needed.

Huawei is the most obvious victim of trade tensions between the United States and China that are showing little signs of de-escalation, but directly or indirectly, Apple's lucrative smartphone business could also be negatively impacted by this whole unstable and unpredictable political kerfuffle.

Foxconn, the Taiwanese electronics giant used by Apple to assemble millions of its devices, said it now had enough capacity that every iPhone sold in the U.S. could be produced outside of China.

Apple has not given Hon Hai instructions to move production out of China, but it is capable of moving lines elsewhere according to customers' needs, Liu added.

During an investor meeting earlier today, Foxconn executive Young Liu (via Bloomberg) relayed that the company shouldn't have any problem meeting Apple's production needs in any type of political environment. At least this way, Apple's iPhone business will remain somewhat insulated in the long-term. Just a few weeks ago, J.P. Morgan indicated that Trump's 25% tariff would result in an iPhone that's 14% more expensive. While it's not sure that whether it's to reduce the import duties in India or whether those phones would end up outside the country, India could be key player for Apple now.

Other reports by Iphone Fresh

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