Escalation of the US-China Trade War: It Will Take Years to Move Apple Contractors from China

Escalation of the US-China Trade War: It Will Take Years to Move Apple Contractors from China

Last week, US President Donald Trump brought down the stock market with his statements on foreign trade policy in relation to China. After his statements, the Dow Jones Index notably fell, and the shares of many American companies in the technology sector, whose business is somehow connected with China, lost in price. Trump not only expressed his willingness to raise tariffs on imports of goods from China, but he also urged the “great American companies” to leave this country, and publicly called the current leader the “enemy”.

Due to this, Apple’s shares fell by 4.6%, and the stock price of AMD suffered from these statements most of all, it fell by 7.4%. Intel shares rate fell on 3.9%, while NVIDIA securities lost 5.2% of their market value.

The main part of Apple products is produced in China by contractors of the company, and if they have to follow the recommendations of the current president of the United States, even transferring a small part of production outside the PRC will take about a year and a half. According to Wedbush experts, the transfer of 5-7% of the iPhone production program from China to India or Vietnam will require at least 18 months. Foxconn will need about three years to transfer up to 20% of production from China, and to transfer half of the production, it will take five years.

In China, at least 1.4 million employees are involved in iPhone factories, and such a migration is unlikely to cost a reasonable price. It is doubtful that Foxconn will agree to sacrifice its profits to compensate for tariff increases in the United States.

1 Comment

  1. China is the problem.

    Trump was elected because of two issues. Any other candidate who took the same position as Trump on those two issues could have defeated him but nobody tried or will try, why? The first issue was let us have a real border, not an understaffed crew guarding 2,000 miles of border. This approach was a joke. So either build a fence or wall or whatever but have a border. The democrats have passed on this issue for years as the Latino vote is is their bread and butter and the Latino voters want an open border.

    The second issue is China trade. Here the democrats are afraid to fix the trade problem as they are concerned they will lose their corporate donors. Corporations now suddenly care a lot about world growth and equalizing income throughout the world. I care about jobs and income in the US. The US globalists and many corporations sold their soul to China for cheap labor (no labor unions, no legal issues, no environmental issues, no or minimal taxes, etc.) to obtain excessive profits. They greatly damaged our country. China does not have a democratic governing system, look at what happens to those who try to change the system, they end up in jail (look at Hong Kong). Gary Cohn in particular was part of the problem not part of the the solution. Thankfully Trump convinced him to leave.

    The solution is to decouple from China. Stop all trade. They will never change. They are like a criminal who has been to jail thirty times in the last thirty years who promises they will change and so we keep letting them out of jail. They steal our IP, force IP transfers, block access to their markets, subsidize industries, manipulate their currency, suppress democracy in China and Hong Kong, threaten Taiwan and Hong Kong, build military bases on reefs, steal our military IP and build weapons that threaten our country, cyber attack our industry, sell goods under cost, wipe out industries, create deflation, threaten their neighbors (Vietnam and Philippines) mineral riches, etc. They alone cost the US billions in IP theft and billions and billions in military costs to deal with their military build-up. We should not be trading with a country that puts Muslims in concentration camps and forcibly gives drugs to Muslim women to ensure they will never have children. Let’s not forget the fentanyl they export to our country.

    The answer is to decouple.

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