Reportedly, tapping factories across India and Brazil has not reduced Apple’s reliance on China, the tech giant’s supply chain statistics showed, surging the stakes for the iPhone manufacturer since U.S. President Donald Trump wages a trade battle and enforces more tariffs. Seemingly, Apple faces with tariffs of 15% slapped by Trump’s government on major products produced in China like wireless headphones and smartwatches effective from September 1, with a tax on its top-selling iPhone, to start from December 15. Few US companies are as firmly bound to Asia’s major economy as Apple. The contract basis factories of Hon Hai Precision Industry Co. Ltd.’s Pegatron Corp., Foxconn, Wistron Corp., and others employ thousands of workers to manufacture Apple devices.
In the last few years, Apple’s contract manufacturers expanded in other countries. In India, there was no Apple contract manufacturer sites in 2015 but flourished to three assembly facilities by the end of 2019, counting a factory owned by Foxconn. Apparently, Apple taps the operations in India to evade steep import levies on iPhones in one of the fast-budding mobile phone markets globally, similar to Apple and Foxconn’s step to open a manufacturing facility in Brazil. But the factories in other countries are smaller than China and, in the case of Brazil and India, Apple only uses them to fulfill domestic demand.
Recently, it was questioned that will Apple be capable to flourish despite trade war. Apple’s stock lead U.S. stocks climbing, buoyed by the likelihood of resumed trade conciliations with China, but a few Wall Street companies stated that the technology giant is positioned better than some may think even if the trade spat persists. In a note to investors, Samik Chatterjee—J.P. Morgan Analyst—said, “While the trade and tariffs standoff contributing to a calmer macro backdrop is a source of proceeds risk for Apple, we observe certain silver linings in relation to timing that can allow Apple to move the challenging dynamic for better.”