To avoid the US’ $200 billion tariff slapped on Chinese goods, smartphone giant Apple’s manufacturers are looking to shift business from China to Vietnam and other Southeast Asian countries.
GoerJek—a Chinese firm assembling Apple’s non-cable earphones (AirPods)—has just notified its suppliers about its plan to transfer production and business operations to Vietnam. Nikkei stated that despite already running an iPhone earphone manufacturing facility in northern Vietnam, the firm still intends to run away from China due to the risk of suffering damage from the US-China trade war.
In addition to GoerJek, other Apple assembly manufacturers also have similar intentions. Specifically, Cheng Uei, a Taiwanese firm specialised in manufacturing connecting wires and charger equipment for iPhones, and Petragon, the second largest iPhone assembly firm only behind Foxconn, has just revealed plans to transfer its manufacturing line to Taiwan or Southeast Asian countries like Vietnam, Thailand, and the Philippines.
Previously, Taiwan-based Delta Electronics, which specialises in supplying components for iPhones and Macbooks, stated that the firm will focus on its subsidiary’s business in Thailand, then expand to India and Slovakia.
Nikkei quoted a leader of Quanta Computer, which specialises in manufacturing Apple Watch and Macbook, as saying: “We have some manufacturers aside from China to meet the temporary demand if the trade war keeps rising.”
The US government on September 24 officially applied 10 per cent tariffs on $200 billion worth of Chinese imports. It is forecast that as of the end of this year or the beginning of next year, the rate will be increased to 25 per cent.
According to a research released by China’s AmCham, two-thirds of 430 US firms in China have been impacted by the trade war. Especially, 30 per cent are considering moving out of the country.
High-technology is one of the segments suffering the largest damage from the trade battle. Airpods, Apple Watch, and HomePod were Apple’s products listed in the $200 billion package of Chinese goods that were slapped extra tariffs on in September.
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Featured image credit: vir.com.vn