iPhones could be produced elsewhere if the US-China trade war escalates.

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. The move was caused by US-China trade tensions, Nikkei reported Wednesday.

China had 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 Apple CEO Tim Cook in June said he “doesn’t anticipate” this happening.

“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 another Chinese tariff 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.

It comes a week after reports that Apple was preparing to move production outside of China if the trade war escalates.

According to Bloomberg, Apple’s Taiwanese manufacturing partner Hon Hai Precision Industry, or Foxconn, can make enough iPhonest o meet the needs of Apple’s US market outside China. 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 immediately respond to a request for comment.


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