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Apple considers moving production from China to avoid tariffs: WSJ

Apple considers moving production from China to avoid tariffs: WSJ


Apple considers moving production from China to avoid tariffs: WSJ


Apple chief design officer Jony Ive (L) and Apple CEO Tim Cook inspect the new iPhone XR during an Apple special event at the Steve Jobs Theatre on September 12, 2018 in Cupertino, California.

Justin Sullivan | Getty Images News | Getty Images

Apple is considering moving final assembly for some products out of China to avoid the burden of potential tariffs from the U.S., The Wall Street Journal reported Thursday.

Apple has not made any decision about moving production out of China, which could still take months to put in place once set in motion, according to the Journal. But the company has asked suppliers to figure out the feasibility of shifting final assembly for some devices to places such as Southeast Asia, the Journal reported. Apple’s stock was up more than 1% in premarket trading.

Earlier this month, Foxconn, Apple’s main supplier for iPhones and iPads in China, told Bloomberg it has the ability to build enough iPhones outside the country to satisfy demand. Apple is expected to launch its new iPhones in September. President Donald Trump hiked tariffs by 25% on $200 billion worth of Chinese goods last month and warned he could apply the same on another $300 billion.

Apple did not immediately respond to CNBC’s request for comment. Foxconn declined to comment.

The financial burden could force Apple to make its new iPhones even pricier if it can’t find an alternative to production in China as consumers are already less willing to pay for new upgrades. J.P. Morgan analysts said in a note last month the company would likely need to increase iPhone prices around 14% to offset the impact of the tariffs.

Apple has already begun accelerating the production and shipment of some of its products made in China to stockpile ahead of tariff increases, the Journal reported. But Foxconn has already begun to prepare to ramp up production for new iPhone models in China, according to the report.

Read the full report at The Wall Street Journal.

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