Apple is in a tough spot, considering it relies on imports for its entire product line, and it will not be able to survive the tariffs unless it makes crucial decisions. It was recently reported that Apple will not move the production of its products to the U.S., which could be an even more costly affair. However, a key Apple supplier is eyeing its production facilities to move to the U.S. in response to the Trump import taxes.
Luxshare is exploring the possibility of moving its production facilities to the United States in response to the new Trump-imposed import taxes
According to a new report from Reuters, Apple supplier Luxshare is exploring the possibility of moving some of its product manufacturing to the United States to address the implications of the new tariffs. Trump's tariffs went into effect earlier today, which means that China will adhere to a 54 percent tax rate if it wants to export goods to the United States. The comments were made by Luxshare chairwoman Wang Laichun during a telephone call with analysts, according to information obtained by Reuters.
If you are not familiar with it, Luxshare is one of the key Apple suppliers dealing in the production of high-end iPhone models, AirPods, and Apple Watch models, as well as the Vision Pro. Wang mentions that Luxshare would have limited short-term financial impact due to the newly imposed taxes due to the limited number of quantities it is exporting to the U.S. However, the supplier is still exploring the possibility of an investment strategy that will tackle any future trade disruptions. She stated that the company will continue some plans in China while evaluating new facilities in other parts of the globe, including the United States.
The company needed 1 to 1-1/2 years to build and start up a new production line in places where it already had a factory, she said.
Asked if tariffs would be borne jointly by businesses in the supply chain and end consumers, Wang said:
“To date, all hardware manufacturers do not foot the bill for tariffs or logistics warehousing … Nothing like this has ever happened and I think it will be the same in future.”
But she acknowledged concerns that customers would seek lower prices because of the tariffs, adding, “Customers have always collaborated with suppliers on how to enhance competitiveness.”
Luxshare is familiar with expansion as it already has running operations in Malaysia, Thailand, Vietnam, Mexico, and the U.S. However, investments and manufacturing facilities are limited in the United States, which could cause trade disruptions. The supplier did not share further details on its plans and when or where it will see fit to expand its manufacturing facilities. However, Wang did share that it takes about 12 to 18 months to develop new production lines in countries where it already operates, so we do have an estimated time frame if the plans go ahead. We will keep a close eye on the move, so stick around for more details.
