Apple has a backup plan if the US-Chinese trade war triggers the iPhone tariffs

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Apple Inc. has a contingency plan if the trade war between the US and China becomes unmanageable.

The company's main manufacturing partner based in Cupertino, California, has the capability to manufacture all iPhones to the United States outside of China, if necessary, according to a senior executive of Hon Hai Precision Industry Co. The Taiwanese manufacturer under contract now manufactures most smartphones on the Chinese mainland.

China is a crucial cog in Apple's business, the origin of most of its iPhone and iPad as well as its largest international market. But President Donald Trump has threatened Beijing tariffs on Chinese products, worth about $ 300 billion, which would increase tensions while imposing a punitive tax on the most profitable product of Apple.

Hon Hai, also known as Foxconn, is the largest manufacturing partner of the US giant. It will fully support Apple if it needs to adjust production as the US-China business niche becomes darker and more unpredictable, said Tuesday Young Liu, chairman of the board and head of the semi- driver, during a briefing with investors in Taipei.

"25% of our production capacity is outside of China and we can help Apple meet its needs in the US market," said Liu, adding that investments are currently being made in India for Apple. "We have enough capacity to meet Apple's demand."

Apple has not ordered Hon Hai to move its production out of China, but is able to move lines elsewhere according to the needs of its customers, Liu said. The company will react quickly and rely on localized manufacturing in response to the trade war, just as it foresaw the need to create a base in the US state of Wisconsin two years ago, did it? he declares.

It is unclear whether India will one day become a major production base for the Apple brand device. Foxconn is currently conducting quality tests for the iPhone Xr series and plans to begin mass production at a plant in the suburbs of Chennai. The oldest models are already assembled in a Wistron factory in Bangalore.

Foxconn also agreed to build a 13,000-strong Wisconsin facility in exchange for more than $ 4.5 billion in government incentives. But this project has since been criticized for its low-paying jobs, sudden layoffs and ever-changing goals. On Tuesday, executives reaffirmed this job goal, saying the construction was on schedule and that it would hire up to 2,000 Americans by the end of 2020.

She will also start making networking and server products for the US market by the end of next year, in addition to LCD screens starting next year, Liu said.

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