Apple says U.S. tariffs on China would backfire

Apple might shift '15 to 30 per cent' of iPhone Mac Book production out of China

China's loss is er Mexico's gain

The risks of heavily depending on manufacturing in China were determined by Apple as too high to procrastinate any further, it said, even if another Chinese tariff doesn't hit. A number of current assemblers, including Foxconn, Pegatron Corp. and several others, have been asked to evaluate options outside of China, the report said.

China is a crucial cog in Apple's business, the origin of most of its iPhones and iPads, as well as its largest global market, but US President Donald Trump has threatened Beijing with new tariffs on about US$300 billion of Chinese goods, an act that would escalate tensions while levying a punitive tax on Apple's most profitable product.

It is thought that between 15 and 30 per cent of activities could be moved to other countries, with India, Indonesia, Malaysia and Mexico among the candidates.

According to Bloomberg, Apple's Taiwanese manufacturing partner Hon Hai Precision Industry, or Foxconn, can make enough iPhones to meet the needs of Apple's USA market outside China.

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The iPhone maker is preparing for a major restructuring of its production chain due to the trade war between the United States and China.

"US tariffs on Apple's products would result in a reduction of Apple's U.S. economic contribution", the company said.

Earlier this month, credit rating agency Fitch said it views Apple, Dell Technologies Inc and HP Inc as potential blacklist candidates if China blacklists US companies in retaliation for restrictions on Huawei.

This is not the only production report about Apple to surface. In its filing, Apple stopped short of saying that it would have to raise prices for products like the iPhone and the iPad.

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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 U.S. goods.

Apple's letter sent on June 17, 2019 outlines which of its products would be hurt by the tariffs.

A man holds Apple smartphone outside an Apple store in Beijing, China, September 16, 2016.

Nikkei also reported that the suppliers had no specific deadline to finalize their business proposals.

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A couple of years ago, Apple supplier, Winstron started making iPhones in Banglore, India.

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