If the trade war between the US and China spirals out of control and leads to Chinese retaliation against American tech production, is Apple hosed? Not necessarily. Senior Foxconn exec Young Liu told investors that his manufacturing company has “enough capacity” to make US-bound iPhones outside of China if necessary. About a quarter of that capacity is elsewhere, Liu said, including growing Indian production. While Apple hasn’t made any moves on that front, Foxconn can shift its lines elsewhere if things go south.
China reportedly met with tech companies in recent days, telling them not to comply with US orders that would dramatically affect their Chinese manufacturing plans. It allegedly threatened serious consequences, although it didn’t outline what those were.
The safety net could be vital for Apple, not to mention for millions of people who could suddenly be cut off from future iPhones. However, this doesn’t guarantee that Apple or other companies would be safe. Even if Apple can keep relying on Foxconn outside of China, some of its individual component suppliers are still located in the region — there could be trouble if any of those partners are cut off. And even a quick transition could still choke production at a critical moment if it happens anywhere near the release of new iPhones. While Apple might avoid the worst, its situation could still be far from ideal.