Guest article by – David Corne
President Trump announced on Twitter last Friday that Apple will not be exempt from paying tariffs on Chinese parts for the new Mac Pro. Trump’s Tweet refers to the proposed 25% tariff on over $300 billion in goods imported from China, including a wide range of technological products. Apple’s decision to move the final assembly of the Mac Pro from their plant in Texas to China may be in jeopardy if the tariff is actually instated. Despite his insistence that Apple should “build their plants in the United States,” Trump later pledged to “work it out” with Apple CEO Tim Cook.
Apple reconsiders Chinese supply chain
Given the uncertainty of the potential trade tariff with China, which is currently postponed until further notice, Apple is looking for alternatives to its supply chain in China. Sources close to Apple confirmed that Apple is concerned about its heavy reliance on Chinese manufacturing. The looming tariff is yet another push for the American tech giant to search for new suppliers and facilities and diversify its supply chain to other parts of Southeast Asia. This change in Apple’s manufacturing, however, runs the risk of supply chain degradation and stagnation for Apple, a problem that other major tech companies will also face.
Trump vs. Technology
Since his inauguration, Trump has taken measurable action against the technology industry, including tariffs that have cost the industry $1.3 billion only in 2019, despite a 31% decrease in imports from last year. Trump’s trade war with China is criticized as a mere coverup to raise taxes on tech goods, costing consumers billions of dollars more on products, according to Consumer Technology Association. As the US stalls amidst political conflict, China’s tech sector is becoming more independent in its own national innovation sector.
Huawei looks outside the US market
While Apple struggles on the US side of the US-China tech cold war, the Chinese tech giant Huawei looks to expand in other regions, particularly Eastern Europe. Huawei is currently implementing infrastructure and energy projects, investing in communications and information sectors, and sponsoring educational programs for youth in the Balkans, hoping to increase profits in the region. In a highly interdependent world, smaller countries like Serbia, Croatia, and Albania must find a balance between cooperating with both the US and China.
The US-China trade war doesn’t look like it is coming to an end any time soon. As tech companies on both sides scramble for alternative solutions, consumers around the world will continue to feel the negative effects.
If you’d like to hear more news on finance and tech, visit Financial Hobby.