Foxconn founder Terry Gou announced that he will be stepping down as chairman from July 1st. In an interview with Bloomberg, Gou said “I am urging Apple to move to Taiwan,” when he was asked if Apple would move the production outside China. Foxconn is one of the major manufacturers for iPhone and runs the fabled factory in Zhengzhou, China.
The statement from Foxconn founder comes at a time when Apple is reeling under the pressure of trade war between the U.S and China. Trump administration is gearing up to impose 25 percent tariffs on phones, laptops, and tablets manufacture in China. Needless to say, this move will adversely affect Apple’s ability to get products manufactured from China.
Apple has requested the authorities to exempt their products from the tariff. The company reasons that this move would “result in a reduction of Apple’s US economic contribution” and “weigh on global competitiveness.”
Meanwhile, Apple seems to be bracing for the impact and has already asked major suppliers including Foxconn to study the feasibility of moving up to 30 percent of its production out of the country. Currently, Apple is exploring the possibilities. Apparently, India and Vietnam were on the top of the list, followed by Mexico, Malaysia, and Indonesia.
Our Take
As expected the ongoing trade war is set to damage the economic prospects for both the countries. People in China are calling for a boycott of Apple products. A report also claims that Apple iPhone sales could halve in China. If this happens, Apple’s global sales could drop significantly as China accounts for 18% of Apple Sales.
Apple is trying to cajole the Trump administration to drop the tariffs. The company has warned Trump that additional China tariffs will help rivals and the cost of Apple products will rise significantly. It is worth noting that Apple has been successful in lobbying against extra tariffs in the past. Last year, Apple successfully lobbied and got smartwatches and Bluetooth headphones removed from the list of goods that the U.S added an extra tariff of 10 percent.Sponsor ads:
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What do you think of the ongoing trade wars between the U.S and China? Let us know in the comments below.
[via-Bloomberg]
