In the ongoing trade ban imposed by the U.S. on Chinese products, the Trump administration has furthermore threatened to impose new levies to cover nearly all imports from China, thereby putting Apple and other manufacturers under pressure to manufacture their products in the States itself to avoid tariffs.
In the face of this comes to report about Apple Inc shifting manufacturing of its latest Mac Pro desktop computer to China from the United States.
China plays a very significant role in the growth and revenue of Apple with the economy being a central market for Apple and a major production center of Apple’s devices.
Last week, Nikkei had reported about Apple asking its major suppliers to assess the cost implications of moving 15% to 30% of their production capacity from China to Southeast Asia.
Yesterday, Apple’s shares were down marginally at $198.69.
D.A. Davidson analyst Tom Forte thinks that Apple’s move is indicative of their high confidence in the U.S. and China resolving their trade disputes in the near future.
Moreover, the Wall Street Journal also talked about how Apple’s decision follows the conclusion of them getting tax subsidies for making Mac Pro desktops in a plant in Texas that is run by contract manufacturer Flex Ltd.
This move also comes in the face of the recent declining sale of its Mac products. The Mac Pro, which costs about $6,000 and is targeted at creative professionals, accounted for less than 10% of Apple’s total sales in 2018, the majority of sales constituting Apple’s iPhones.
(This) serves as a reminder that, relative to the U.S., manufacturing in China remains a lower-cost alternative and benefits from an existing infrastructure, versus having to, potentially, rebuild one in the U.S. – Forte
The Journal’s report included the information that Apple has partnered up with contractor Quanta Computer Inc for the manufacture of Apple’s Mac Pro, along with ramping up production at a factory near Shanghai.