Production of Apple iPhones bound for the U.S. could be shifted out of China should the trade war between the U.S. and Beijing continue to escalate, a senior executive at Foxconn said Tuesday.
The comments from the Taiwan-based company, which boasts Apple as its biggest customer, come after President Trump threatened to impose additional tariffs on $300 billion in products from China, where many Apple smartphones and devices are made.
“Twenty-five percent of our production capacity is outside of China, and we can help Apple respond to its needs in the U.S. market,” Young Liu, head of Foxconn’s semiconductor division, said during the company’s first investor conference in Taipei, according to reports. “We have enough capacity to meet Apple’s demands in the U.S. market.”
Liu said the trade war between the U.S. and China “will have some impact, but it will be limited.” Foxconn has the manufacturing capacity outside of China to support Apple if it needs to move its production lines away from the country because of the trade dispute, he said.
The company is considered the world’s largest contract electronics manufacturer and has facilities in countries including the U.S., Australia, Brazil, Mexico, Japan, and Indonesia, among others.
Trump announced in 2017 the company would build a plant in Wisconsin that would create 13,000 jobs in the state. In exchange for its $10 billion investment, Foxconn received $4.5 billion in government incentives. The company said Tuesday it planned to hire 2,000 U.S. workers by the end of 2020.
The U.S. and China had been engaged in continued negotiations over a trade deal this year, but those talks stalled in May. As a result of the impasse, the Trump administration hiked tariffs up to 25% on $200 billion in Chinese goods. Beijing subsequently hit back against the U.S. by raising levies on $60 billion in U.S. imports.
Trump is expected to meet with Chinese President Xi Jinping at the G20 summit in Osaka, Japan, this month, but the president warned Monday if the talks did not come to pass, he would move forward with the additional duties.
