Asian Apple suppliers are the latest casualty in the war of words between Apple and the Trump administration.
Key suppliers saw their share price fall by as much as 10% after Apple warned about the impact of Trump’s latest trade tariff proposal and Trump hit back with a suggestion that the company should do its manufacturing in the US …
Reuters reported a lengthy list of Asian Apple suppliers whose shares were hit.
Apple warned that the Apple Pencil, AirPods, Apple Watch and even the Mac mini could find themselves subject to a massive 25% tariff, which cost would likely be passed on to consumers. CEO Tim Cook has been one of many business execs to warn that Trump’s trade war will do most damage to the US economy.
Lens Technology, Universal Scientific Industrial Shanghai and Suzhou Anjie Technology fell between 6 and 8 percent.
In Taiwan, camera lens-maker Largan Precision slid nearly 8 percent, Foxconn fell 3.4 percent, while assembler Pegatron Corp dropped nearly 4 percent.
Taiwan’s ASE Technology, which counts Apple as one of its top clients, fell 2.9 percent.
Cook has also repeatedly explained why it is not realistic for Apple to move its manufacturing base to the US. As we’ve outlined ourselves:
While the usual assumption is that Apple manufacturing takes place in China because of cheap labor, that’s a relatively small benefit, labor costs accounting for just 2.2% of the cost of a typical iPhone. Lead iPhone supplier Foxconn has increasingly been moving to fully automated production lines, and is even planning completely automated factories with just a handful of workers. Any manufacturing operation set up in the US would almost certainly use this approach and thus create very few jobs.
The idea of Apple carrying out major assembly operations in the U.S. when the vast majority of its suppliers are all centred in and around one city on the other side of the Pacific simply isn’t credible.
