If there's anything people like more than Apple products it's complaining about their price--and that was true even before Apple announced a $1,000 monitor stand. The last thing anyone wants is for those products to become even more expensive, and Reuters today reported that Foxconn believes it can make sure the U.S.-China trade conflict doesn't make that happen.
By now you probably know things are a bit strained between the U.S. and China. That's most readily apparent via tariffs applied to goods imported from the People's Republic, which rose from 10% to 25% in May and their application to more product categories. U.S. companies have to absorb those rising costs in some way, which could mean the effects of these tariffs are effectively passed onto U.S. consumers via price increases.
Foxconn is Apple's largest supplier. Easing concerns about the effect the U.S.-China trade war might have on its relationship with Apple, the company said that roughly 25% "of our production capacity is outside of China, and we have enough capacity to meet Apple’s demand in the U.S. market," according to Reuters. The manufacturer also said that it's willing to modify its production lines as necessary to keep pace with whatever Apple needs.
There's little surprise there. Other companies, such as MSI, have also shifted production away from their factories in China to evade U.S. tariffs. They don't have to move all of their production outside China--units destined for other countries aren't affected by the tariffs--so they move whatever is necessary to keep costs down on devices meant for the U.S.
Foxconn reportedly said tensions between the U.S. and China will also make the factory it's building in Wisconsin that much more important. It's not really clear how, though, because the company was said to be planning to offer research and engineering jobs instead of focusing on manufacturing. (After it received billions of dollars in tax cuts, ostensibly so it would help revive the blue collar job market in the U.S.) Maybe that will change soon.
At least for now Foxconn seems confident it won't be the cause of price bumps on new Apple products. That isn't to say the prices won't rise naturally--as the countless memes about the products revealed at WWDC 2019 make fun of. Now, the question is how many suppliers can make similar claims to ease the concerns of other companies bearing the costs of these tariffs.
