Why Apple is stuck in the tariff fever

Each iPhone comes with a label that tells you it is designed in California.

While the elegant rectangle, which rules a lot of our lives, is indeed designed in the United States, is probably lively thousands of miles in China: the country has hit the US President Donald Trump's tariffs, is now increasing to 245% of some Chinese imports.

Apple sells more than 220 million iPhone a year and most estimates nine to 10 are made in China. From the shiny screens to the batteries, many of the components in the Apple product are made, provided and assembled on the iPhone, iPad or MacBooks in China. Most have been sent to the US, the most large market on Apple.

Fortunately for the company, Trump suddenly released smartphones, computers and some other electronic devices from his tariffs last week.

But comfort is short -lived.

Since then, the president suggested that more tariffs are coming: “Nobody receives” from the hook, “he wrote to the Truth Social, as his administration investigates” semiconductors and the entire electronics supply chain. “

The global supply chain that Apple has advertised as a force is now vulnerable.

The US and China, the two largest economies in the world, are interdependent, and Trump's striking tariffs have increased this connection overnight, leading to an inevitable question: Who is more dependent on both?

China has greatly benefited from hosting assembling lines for one of the most valuable companies in the world. It was a calling map to the West for quality production and helped to stimulate local innovation.

Apple entered China in the 1990s to sell computers through third-party suppliers.

Around 1997, when he was on the threshold of bankruptcy, as he struggled to compete with rivals, Apple found a rescue line in China. A young Chinese economy was opening foreign companies to strengthen production and create more jobs.

It was not until 2001, although Apple officially arrived in China through a Shanghai -based trading company and began making products in the country. He partnered with Foxconn, a Taiwanese electronic manufacturer working in China to make an iPod, then IMACS and subsequently iPhone.

As Beijing began trading the world – not less encouraged by the United States – Apple has increased its mark on what is becoming the world factory.

China was not prepared at the time to make an iPhone. But Apple has chosen their own harvest from suppliers and helped them grow into “production superstars”, according to the supply expert, Lin Ksueping.

He cites the example of Beijing Jingiao, now a leading manufacturer of high -speed precision machines, which is used for effectively sophisticated components. The company that used acrylic was not considered a manufacturer of machine tools – but in the end it developed machines for cutting glass and became the “star of Apple's surface processing,” says G -L Lin.

Apple opened its first store in Beijing in 2008, the year in which the city hosted the Olympics and China's relations with the West was on the highest road. This was coming down with 50 stores soon, with customers queuing from the door.

As Apple's profit margin increases, its mounting lines in China have increased, with Foxconn operating the world's largest iPhone factory in Zhengzhou, which has since been called the “iPhone City”.

For the rapidly developing China, Apple has become a symbol of advanced Western Tech – simple but original and slippery.

Today, most of Apple's prized iPhone is manufactured by Foxconn. The enlarged chips that feed them are made in Taiwan, from the largest global chip manufacturer, TSMC. Production also requires rare earth elements that are used in audio applications and cameras.

About 150 of the top 187 Apple suppliers in 2024 had factories in China, according to an analysis by Nikkei Asia.

“There is no supply chain in the world that is more critical than China,” Apple CEO said in an interview last year.

In Trump's first termApple provided exceptions to the tariffs it imposed on China.

But this time the Trump administration set an example of Apple before turning the tariffs for some electronics. He believes that the threat of steep taxes will encourage business to make products in America instead.

“The army of millions and millions of human beings who are fucked into small screws to make an iPhone – this kind of thing will come to America,” said Trade Secretary Howard Luni in an interview earlier this month.

White House Secretary Carolyn Levitt reiterated that last week: “President Trump made it clear that America could not rely on China to produce critical technology such as semiconductors, chips, smartphones and laptops.”

She added: “In the direction of the president, these companies are in a hurry to obtain their production in the United States as soon as possible.”

But many of them are skeptical of this.

The thought that Apple can move its surgery to assemble in the United States is a “pure fantasy”, according to Eli Friedman, who previously sat at the company's academic counseling council.

Friedman said the company was talking about diversifying its supply chain away from China since 2013 when it joined the board – but the US was never an option.

He added that Apple did not make great progress in the next decade, but “really made efforts” after the pandemic when The Chinese strictly controlled insidious blocked Injuries production production.

“The most important new assembly places are Vietnam and India. But of course, the bigger part of Apple's Assembly is still being carried out (in China).”

Apple didn't answer BBC questions But the website tells him that her supply chain It covers “thousands of companies and more than 50 countries”.

Any change in the current statue of Apple supply chain would be a huge blow to China trying to start growth after the pandemic.

Many of the reasons why the country wanted to be a production center for Western companies in the early 2000s are true today – it creates hundreds of thousands of jobs and gives the country a crucial advantage in world trade.

“Apple is sitting at the intersection of tensions in the US and China, and tariffs highlight the cost of this exposure,” says Jigar Dixit, a supply and operation chain consultant.

This may explain why China has not worshiped Trump's threats, instead avenging 125% levies on US imports. China has also imposed control of exports of a number of critical rare minerals and magnets it has in stores, struck by the United States.

There is no doubt that US tariffs are still gathering in other Chinese sectors, but it will hurt.

Not only Beijing is facing higher tariffs – Trump has made it clear that he will target countries that are part of the Chinese supply chain. For example, Vietnam, where Apple has moved AirPods production, is facing 46% tariffs before Trump strikes a 90 -day break, so moving production elsewhere is not an easy way out.

“All possible places for the huge Foxconn assembly places with tens or hundreds of thousands of workers are in Asia. All these countries face higher tariffs,” said Friedman.

So what is Apple doing now?

The company is struggling with firm competition from Chinese companies, as the government is pushing for modern production production in a US race.

Now that “Apple has cultivated the electronic production capabilities of China, Huawei, Xiaomi, Oppo and others, they can use the mature Apple supply chain,” according to G -Lin.

Last year, Apple lost its place as the largest smartphone seller in China on Huawei and Vivo. The Chinese do not spend enough because of a slow economy and with Chatgpt, banned in China, Apple is also struggling to preserve an advantage among buyers looking for AI-fed phones. This is even offer rare discounts of iPhones in January to increase sales.

And while operating with the ever -closer grip of its President Jinping, Apple had to Limit the use of Bluetooth and Airdrop On its devices like the Chinese Communist Party, it seeks to censor the political messages that people share. It withstands repression of the technology industry that even Touched the founder of Alibaba and Multibiliary Jack MaS

Apple has announced an investment of $ 500 billion (£ 378 billion) in the US, though this may not be enough to appease Trump's administration for a long time.

Given the few turns and the uncertainty about Trump's tariffs, more unknown levies are expected -which can again leave the company with a small maneuvering room and even more time.

Dixit says that smartphone tariffs will not cripple Apple if they return their head again, but regardless of the pressure – both operationally and politically “to the supply chain, which cannot be browned quickly.

“It is clear that the severity of the immediate crisis is reduced,” says G -n Friedman, citing release from last week for smartphones.

“But I really don't think that means Apple can relax.”

Additional Wang fan reporting