Apple iPhone suppliers said to consider move if tariffs hit 25%

This article first appeared in The Edge Financial Daily, on December 14, 2018.
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TAIPEI: Apple Inc’s suppliers will keep making iPhones in China if the US imposes tariffs on the devices — unless those levies skyrocket.

The suppliers figure they can keep production in China at a 10% tariff level but will consider shifting out of the country if the US moves to 25%, according to people familiar with the matter. Apple and its partners are assessing their supply chains as the US and China fight over trade terms between the world’s two largest economies.

iPhones — the majority of which are made by assembly partner Hon Hai Precision Industry Co in China and shipped around the world — have so far been spared in a tit-for-tat trade war. But President Donald Trump told The Wall Street Journal last month that tariffs could be slapped on smartphones and laptops made in China, the world’s largest manufacturer of electronics.

Apple has long used China as its production base for everything from the signature iPhone to iPads and Macs. The company’s supply chain now spans hundreds of companies, culminating in assemblers such as Hon Hai and Pegatron Corp. — Bloomberg