What exactly is a price list?
Customs duty is an import tax, nothing more, nothing less. Customs duties imposed on products imported from China are not paid by the Chinese. Do you want to know who pays the tariffs on Chinese imports to the United States? American companies do, and if these companies want to recover this amount, they will increase the price of their products. So, contrary to what you’ve heard, the bottom line is that if the United States imposes tariffs on products from, say, China, American businesses and consumers pay for it.
Foxconn’s iPhone factory in India. |Image credit – Outlook
This does not mean that China’s economy will not be affected, as demand for products targeted by tariffs is expected to decline due to higher prices. However, since the iPhone is a US company, the only negative impact iPhone tariffs would have on China would be job losses if Apple decides to reduce production of the device in the country.
What Apple learned from this period was that it needed to find an alternative location to manufacture iPhones outside of China. India is one such country. There are factories in the country that can assemble iPhones, the supply chain is within reach, and Apple has been producing iPhone models in India since 2017. Furthermore, the availability of cheap and abundant labor also enriches India. It has the potential to replace China.
The first iPhone made in India was the 2017 “low-cost” iPhone SE
Besides Foxconn, which accounts for half of the iPhone units manufactured and shipped in India, Pegatron and Tata Electronics also assemble iPhone models in southern India. Smartphones have become India’s largest export to the US, with $2.88 billion worth of smartphones delivered from India to the US in the first five months of this year. Five years ago, before Apple ramped up iPhone production in India, total smartphone exports to the US were much lower at $5.2 million.
In 2019, Apple manufactured and sold the four-year-old iPhone 6s in India. |Image credit unknown
Eventually, Apple may one day produce more iPhones in India than in China for export. But that day is still far in the future.
