Opening factories in Brazil and India has not reduced Apple’s reliance on China, the corporate’s supply chain data shows, elevating the stakes for the iPhone maker as U.S. President Donald Trump wages a trade battle and guarantees more tariffs.
Apple faces duties of 15% slapped by Trump’s management on major products made in China resembling smartwatches and wireless headphones on Sept. 1, with a tax on its biggest seller, the iPhone, to take effect on Dec. 15.
Few American companies are as tightly bound to Asia’s largest economy like Apple. Contract factories controlled by Hon Hai Precision Industry’s Foxconn, Pegatron Corp, Wistron Corp, and others employ thousands of people to assemble Apple devices.
Lately, Apple’s contract manufacturers have expanded into different countries. India, for example, had no Apple contract manufacturer areas in 2015; however, expanded to three assembly plants by 2019, including a manufacturing plant owned by Foxconn, which plans to manufacture models from the iPhone X family of devices.
Apple opens the India operations to avoid import duties on iPhones in one of the last fast-rising mobile phone countries in the world, similar to Apple and Foxconn also moved to open a production unit in Brazil in 2011.
However, the factories outside China are smaller in size as well as operations and, in the case of India and Brazil, Apple only makes use of them to meet domestic demand. Apple’s contract assembly units inside China, in the meantime, have added far more sites than outside, with Foxconn alone expanding from 19 areas in 2015 to 29 in 2019 and Pegatron going from 8 to 12, in accordance with Apple’s records. The brand new sites come as Apple has added watches, smart speakers, and wireless headphones to its assembly line.