The intensification of trade disputes between China and the United States may start to cause the reorganization of assembly lines around the world. Multiple gigantic producers of electronic components would be thinking about expanding factories outside China, mainly targeting Mexico. According to Reuters, among the brands are big names like Foxconn, Pegatron, and Luxshare. The first, directly involved in the production of the iPhone, would even take the assembly line of the Apple iPhones to Mexico. This would be a significant change in the “geography” of the device’s production. Also Read - Apple iPhone SE 2020 to now be assembled locally in India
iPhone production in Mexico
The change would be linked to the fear of increasing tariffs in negotiations between countries. That can also make life more difficult for those who produce in China and want to sell in the US. Potentially causing an increase in production costs that can increase the price for the consumer, or reduce profit margins. Also Read - After iPhone 12, Apple may discontinue iPhone XR and iPhone 11 Pro series: Report
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The choice for Mexico would have to do with a new agreement made between North American countries. It allows tariff-free export to the United States in some cases. This would also be beneficial for the companies involved and would avoid the bureaucracy of war between the US and China. Also Read - iPhone XR, SE 2020 and iPhone 11 get special price cut for Apple Days sale on Flipkart
Although the Mexican plan is still a possibility, it is a fact that Foxconn has sought to expand its operations outside of China. The company has also announced a $1 billion investment in India. Where the company will produce iPhones to avoid import tariffs in the country. Moreover, Apple recently said that it is now making the iPhone SE in India.
The company has been preparing to create two distinct assembly lines, precisely to circumvent trade barriers. When directly questioned, however, companies did not comment on the matter or deny it. Foxconn stressed that it already has five plants in Mexico, but says it has no plans to expand that number.