Apple Shows Reliance On China Ahead Of New Tariffs

Supply chain data from Apple indicates the tech firm is still dependent on China despite using manufacturing plants in Brazil and India, Reuters reported on Wednesday (Aug. 28).

As the trade war between the U.S. and China continues, President Donald Trump has hinted that more tariffs are on the way.

Apple is facing a 15 percent tariff for China-made smartwatches and wireless headphones on Sept. 1 and for the iPhone on Dec. 15.

Although manufacturing has expanded into other countries, the factories outside China are smaller. At the same time, Apple has expanded its factories in China to accommodate additional products like watches and smart speakers. Of Apple’s suppliers that manufacture chips, glass, cables and more, 47.6 percent are in China.

Apple CEO Tim Cook told investors in July on the company’s quarterly earnings call that speculation about shifting production due to U.S. tariffs is not reliable.

“The vast majority of our products are kind of made everywhere,” Cook said on the call. “There is a significant level of content in the United States, and a lot from Japan to Korea to China and the European Union also contributes a fair amount. … I think that will carry the day in the future as well.”

President Trump said on Aug. 19 that he spoke with Cook over how U.S. tariffs on China will affect the company, and also how they might help Samsung, a competitor from South Korea. Trump said Cook “made a good case” about how the tariffs could adversely affect Apple, especially since Samsung won’t face the same restrictions. The U.S. and Samsung made their own trade agreement last September.

It’s a critical time for Apple, who could announce the newest iteration of the iPhone as early as next month. The company released its newest iOS 13 beta to developers on Aug. 15, which included an asset called “HoldForRelease” that showed a home screen of an iPhone with the date set to Sept. 10, around the time the tech giant usually holds its fall press event.