Customs-rocade: What strategy Apple has with Trump’s “Taiffs”

The iPhone-at least $ 700 more expensive in the United States? There are currently speculations after President Donald Trump wants to impose hard tariffs against China and other Apple manufacturers. In the Apple headquarters, you are now considering how best to react to it. China, the country in which most iPhones are created, is to be used to import imports with 54 percent inches. That would be bad for the final customer prices of the smartphone (or Apple’s margin). But alternative regions such as Vietnam (46 percent) or India (26 percent) are also burdened. Apple’s EU headquarters in Ireland would be 20 percent. According to one Bloomberg report Apple is now considering screwing on the prices – also because the topic is so present in the media. But it probably does not stay that: The company tries to reorganize its supply chain to save tariffs.

The good wire

In a first step, Apple will probably try to reduce prices with the suppliers. Component manufacturers and manufacturing partners have to adapt to hard negotiations. Sometimes Apple will also swallow the costs, which reduces the margin.

After all, Apple boss Tim Cook also has a good connection to Donald Trump from his past term. This once helped the group to partially escape the punitive tariffs against China. But Apple also built up manufacturing in other countries, especially in India.

Indian production completely to the USA?

It is precisely this country that Apple could help not to have to have as many import duties. There is currently planning to manufacture more devices in India, the import customs of which is only 26 percent in question, reports that Wall Street Journal. The idea is therefore to send almost all of the iPhones to the USA in the country.

A production of 25 million units is currently planned this year, of which at least 10 million should go into the Indian market. Apple probably needs around 50 million units, so Indian production alone is not enough. However, Apple tries to increase the production. Customs only fall when goods are introduced to a country. Under Trump, this should apply to practically every country in the world, with different high sentences that the importer has to be paid.