The customs truce temporarily saves Apple from the crisis of high costs of “iPhone”

Apple has succeeded in avoiding a crisis that had become the most dangerous since the Kofid-19 pandemic, after US President Donald Trump excluded it from the new wave of new customs duties, which amounted to 125% on the goods manufactured in China, which would have caused widespread suffocation in supply chains, according to a report published by the Bloomberg Network.

Trump gives Apple a “golden deadline”

In a remarkable decision, the White House exempted most of the tariff electronic devices, including iPhone, iPad, Mac, Apple watches and Arthaz, which was considered an important victory for the American technology industry.
Although fees on the products containing semiconductors continued, the reduction of sectoral fees represents a declining relief on Apple, which still depends on China as a basic manufacturing center.
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Analyst Diaranani described from the company “ISI” company as “a great satisfaction for Apple”, explaining that the drawings would have led to great cost inflation.

Emergency plan .. and manufacturing in India

Before the exemption decision, Apple was planning to modify the supply chain by increasing production in India, to reduce dependence on China and avoid fees. Apple factories in India currently produce more than 30 million iPhone devices annually, which can cover a large part of the American demand, especially since the United States represents a third of iPhone sales globally.
But the challenges exist, as the upcoming iPhone 17 is still planning to manufacture it mainly in China, which makes it difficult to shift in the supply chain and threatens to confuse the schedule for its launch in the fall.

Apple’s future is still fraught with doubt

Despite the current exemption, the uncertainty is still the master of the situation, amid the possibility of customs policies again. The company may have to raise prices if the fees are returned, as well as competition with suppliers to reduce the impact of marginal erosion.
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The risk of escalation with China

If Apple goes to transfer production outside China, it may face a negative Chinese reaction, especially since the company achieves about 17% of its revenues from the Chinese market, and runs dozens of stores there, a situation that most American companies do not have.
The Chinese authorities had already started investigations into competition against American companies, and imposed restrictions on government employees’ use of iPhone phones, as part of the escalating tensions after the American campaign on “Huawei”.

China is still the backbone of manufacturing

Morgan Stanley estimates indicate that about 87% of iPhone phones are manufactured in China, along with four in five iPad devices, and about 60% of Mac devices.
Combating, these products make up 75% of Apple’s annual revenue, although the company has started transferring some of its production to Vietnam, Malaysia and Thailand.

Can Apple separate from China?

According to Bloomberg, a complete separation from China is unlikely. Despite Trump’s demands to transfer iPhone to the United States, the lack of local skills and competencies in America makes this an almost impossible option, especially since the Chinese infrastructure is superior in terms of speed and efficiency.
China also remains necessary to meet global demand, as 60% of Apple’s revenues come from outside the Americas.