Apple and Samsung have been fleeing from China for years to save costs. Tariffs just torpedo their strategy
The Trump administration has announced New tariffs. Some that expand the Commercial War to even more countries and that, inevitably, will have severe consequences in the production and distribution chain of large technological ones. Some of them, such as Apple or Samsung, had been trying to reduce their dependence on Chinese manufacturing, moving part of production to countries like Vietnam. A new tariff of almost 50% for countries like Vietnam has just launched its strategy through the air. The new tariffs. Donald Trump has announced a new set of tariffs for all those products that are imported to the United States. The most affected is the main commercial enemy of the country At the moment: China. Adding previous movements, tariffs to the Asian country amount to 54%. Attending to the rest of the victims on the list, there is a country that is specially injured: Vietnam. The United States has imposed a 46% tariff on one of the barracks of the two technological giants, Apple and Samsung. China’s escape. The production of Apple and Samsung products has been linked to China for years. To reduce this unit, both companies have been trying to diversify the supply chain Moving manufacturing to countries like India or Vietnam. This last country has become one of the most attractive destinations for large technological ones, mainly due to their economic but highly qualified workforce. Its port proximity with China also makes it a strategic point, minimizing friction when importing electronic components. Key products. Apple has been manufacturing the AirPods for years of Vietnam, and the assembly of some key products, such as iPad, has been starting its steps in the country for a few years. Some of its strategic business partners, such as Foxconn, They have been investing for years millions of dollars in the Asian country. More relevant if possible is the case of Samsung, who produces much of its phones in Vietnam. The Korean company has been betting on this country for almost 20 years, having consolidated as one of the main producers of electronic components and devices in the country. Leaving Vietnam, pointing out that India was another strategic points in the supply chain of both manufacturers. One in seven iPhone is already manufactured in Indiaand Samsung carries Since 2018 giving life to Galaxy devices in this country. No one was prepared. Apple and Samsung had been moving production out of China for years not only to minimize costs, but to avoid the consequences of the commercial war between the United States and China. Diversifying the supply chain was key to avoid depending on a single region, as well as to bring production closer to emerging markets with great growth margin. Vietnam, Malaysia, Thailand, India … Each and every one of the alternative destinations to China will suffer a very high tariff load. After years of strategy focused on running from China, the new tariffs make the foundations they had been building for years staggered. And the question is clear. What consequences will they have? Who will pay the duck. Although it seems unlikely that both companies kindly invite consumers to accept an increase in the cost of between 26 and 46%, which seems inevitable is that the products of both manufacturers rise in price not only in the United States, but globally. The tariff storm will force a complete readjustment of the current margins of the main Big Tech, since they will have a significant impact on the global supply chain. Voices of the sector, like Mark Gurman, point out what is “essentially impossible” That there is no price increase in the United States, and members of the Federal Regulations Code (CFR), they point out that these rates will mean an increase in about $ 150 per device. Image | Xataka In Xataka | In full tariff war, the EU has found a weapon to press the United States: soybeans
