Apple could move iPhone production out of China if a 25% tariff is imposed

Apple could move iPhone production out of China if a 25% tariff is imposed
The iPhone XS and XS Max

Despite the ongoing trade war between the US and China, Apple’s iPhone has so far avoided any kind of tariffs. A couple of weeks back, though, President Trump warned that he could soon apply either a 10% or 25% tariff to Apple’s best-selling product. Now, according to a new report by Bloomberg, it’s claimed that the Cupertino giant is taking this threat very seriously.

At the moment, Apple has no immediate plans to move its production outside of China. In fact, if President Trump imposes a 10% tariff on electronic imports, the company is reportedly prepared to take the hit and will continue to manufacture its devices in the market. However, if the President chooses a much steeper 25% tariff, it’s reported that Apple will then proceed to reassess its situation.

Allegedly, one of the company’s suppliers has already suggested some alternative locations for iPad and Mac production that would help the giant avoid the import tariffs entirely on these products. But because this migration would be extremely difficult, Apple is waiting for the final word before making any big decisions.

Apple could also choose to move iPhone production out of China – it already assembles some devices in India – but this would require a military-like operation. After all, Apple relies on hundreds of suppliers that are all located within Shenzhen, China, where the majority of the company’s iPhones are manufactured.

From a financial point of view, it’s claimed that a 10% import tariff would result in an earnings-per-share decline of around $1. However, in the case of a 25% tariff, this would increase to a significant earnings-per-share drop of $2.50 if Apple continues with its current manufacturing model.

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17 Comments

1. koioz

Posts: 183; Member since: Nov 29, 2018

That's the drawback of frankenstein phone. Made buy different companies - Foxconn, intel, tsmc, samsung, lg.

2. drunkenjay

Posts: 1700; Member since: Feb 11, 2013

2k iphones incoming.

3. alanrock

Posts: 326; Member since: Oct 04, 2018

merge with Hyperion corporation and move iPhone production on Pandora with Handsome Jack as CEO...zero tariff there :))

4. jellmoo

Posts: 2658; Member since: Oct 31, 2011

The end result would likely be a shift to using India instead. Apple is already feeling the hurt of ever increasing iPhone pricing. Manufacturing needs to stay in a low cost center.

5. xfire99

Posts: 1207; Member since: Mar 14, 2012

Impeach Trumpass and put him in jail. Problem solved!

7. 7thlvl

Posts: 60; Member since: Dec 09, 2018

woah calm down there NPC

15. Galaxy_Apple

Posts: 129; Member since: May 24, 2015

ya lets use all our efforts to help create jobs in china , why even have a county anymore. Do you know why trump even won in the first place.

8. strategic_developer

Posts: 1627; Member since: Jul 17, 2018

Because Apple doesn't have enough money to pay $2.50 on each imported product? Haha. What a sideshow phoney. Yes Trump impose 25%. If Apple moves product, then impose the same tariff no matter what. Either bring protection home or pay. It's time for Coors today their fair share, at whatever cost. Even if it means running them out of business entirely. Small and medium business are facing tax increases, so bigger companies cmcsa have tax cuts. Any company that has more jobs overseas vs at home. Should all be fined on whatever money they make, even if it is held outside the country. The US needs to get touch on corps because the rest of us poor people are tried of paying for their welfare. Death to all greedy corps, no matter who they are.

11. kiko007

Posts: 7520; Member since: Feb 17, 2016

You have no idea how global economics work, do you?

12. maherk

Posts: 7007; Member since: Feb 10, 2012

He doesn't know how to spell production, and you expect him to know how global economics work?

13. kiko007

Posts: 7520; Member since: Feb 17, 2016

Oof... You’re absolutely right.

14. gamehead unregistered

Could care less about iphones

17. tokuzumi

Posts: 1953; Member since: Aug 27, 2009

The manufacturing migration out of China is something that is inevitable. China is rapidly becoming a developed nation. With their taste for Western goods rapidly rising, this will require wage increases. As this happens, it becomes less profitable to manufacture goods in China. Companies will look to exploit the next impoverished continent (most likely Africa).

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