iPhones could be produced elsewhere if the US-China trade war escalates.
Apple has asked its suppliers to look into the possibility of shifting final assembly of some products out of China, according to report from The Wall Street Journal on Thursday. The iPhone maker is looking into moving “up to around a third of the production for some devices” to other countries, including locations in Southeast Asia, the Journal reported.
This follows a Nikkei report Wednesday that said 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. The potential moves are spurred by rising US-China trade tensions.
China said back in May that it would impose a 25% tariff on US goods in retaliation against President Donald Trump’s plan to increase tariffs on products imported from China. Analysts have forecast the cost of iPhones to increase by up to 14% as a result, though in June he’s not expecting that..
“The Chinese have not targeted Apple at all, and I don’t anticipate that happening, to be honest,” Cook said. “I’m hoping that doesn’t happen … the truth is, the iPhone is made everywhere. It’s made everywhere. And so, a tariff on the iPhone would hurt all of those countries, but the one that would be hurt the most is this one.”
Citing “several people,” Nikkei reported Wednesday that Apple wants to rely less heavily on China for its phones even if doesn’t hit, however.
“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.
These add to earlier reports thatif the trade war escalates.
Apple’s Taiwanese manufacturing partner Hon Hai Precision Industry, or Foxconn, can make enough iPhones to meet the needs of Apple’s US market outside China, according to Bloomberg. Foxconn semiconductor division chief Young Liu reportedly told investors earlier in June that 25% of its production capacity is outside the mainland.
Apple didn’t respond to a request for comment.
Originally published June 19.
Update, June 20: Adds more details on reports that Apple may shift some production.