TECH NEWS – An analyst has outlined how the Cupertino-based company could ease its situation by not moving production to the US.

Last week, the Trump administration announced new import tariff plans for nearly every country in the world. Apple will have an uphill battle, as its supply chain exists outside of the US and relies almost exclusively on imports. As a result, the company has been able to keep prices under control for most of its products. Tariffs would make imports quite expensive, and as a result, the company would ultimately have to raise the price of its products, and that certainly applies to the iPhone.

Apple is not going to move overseas production to the United States, as that would add even more costs to the Cupertino tech giant. Its shares have fallen almost 10% on the stock market. Trump has imposed a 54% tax on imports from China, 26% from India and 46% from Vietnam, and even higher taxes on other countries. The country basically wants companies to cut imports and make products locally, but that would be expensive for the economy and ultimately the consumer would have to pay for everything.

On tariffs, Bloomberg editor Mark Gurman outlined how Apple could mitigate the impact of higher import costs. He said Apple should encourage component and manufacturing partners to offer more competitive prices, which could lower Apple’s overall manufacturing costs. It would have to absorb some of the additional costs itself, which would partially offset the tariffs, so that users would not have to pay for everything. In the short term, it would have to change its pricing, and in the long term, it would have to evaluate the impact of the tariffs and expand production to other countries since it would not have to manufacture in America.

Although some countries are developing trade agreements, China is missing out. Apple should not be heavily dependent on the country if it wants to sell its products at the same rate, otherwise demand would drop as the price rises. For now, Apple is reportedly stockpiling its products in preparation for the tariffs, which go into effect on April 9, so that it can sell them at the usual price for a while.

Nintendo has already postponed pre-orders for the Switch 2 in the country, so the situation is set to worsen.

Source: WCCFTech