Apple Warns of Revenge from China After U.S. Representatives Visit, iPhone Shipments May See Impact
Friday August 5, 2022. 07:20 PM , from TheMacObserver
A controversial visit to Taiwan by U.S. House of Representatives Nancy Pelosi has now caused Apple to warn suppliers that China may attempt to get revenge. The result being that China’s response may possibly disrupt iPhone or iPhone component shipments.
In terms of China, the government has expressed a series of emotions regarding the visit and has implemented a series of measures in response. This includes imposing sanctions on Pelosi and her family, to military exercises featuring live-fire within Taiwan’s waters. Additionally, this may also disrupt iPhone production due to further acts of revenge.
A Visit to Taiwan Spurs China Into Revenge, May Affect Apple
For a brief history lesson: China sees Taiwan as a part of its territory. For decades, China has applied pressure to governments in an effort not to recognize Taiwan as a sovereign nation. Many report that military experts believe China will eventually invade the island.
According to reports, earlier in the week, Pelosi had met with Apple chipmaker TSMC as well as Pegatron, who assembles the iPhone. Pelosi made a visit to Taiwan in attempt to show U.S. support as concerns increase about a possible invasion by China. The goal being to show the Chinese government how series the U.S. is in legally helping Taiwan defend itself against a military attack by China.
Despite this, many viewed the plan as a means of provocation rather than diffusion, and it is likely that this is now the case.
In terms of Pelosi meeting with TSMC, this is likely regarding the CHIPS act, as well as possible implications concerning its plant in Arizona. Reports suggest that the Taiwanese company has concerns that Intel may get the majority of subsidies.
To further complicate matters, reports also indicate that Pelosi met with iPhone assembler Pegatron, who is also out of Taiwan. Since this meeting, there have been reports that China is blocking shipments to and from Pegatron’s Chinese plants. Pegatron has denied these claims, though with ambiguity.
Complicating Matters for Apple and iPhone
In a report from Reuters, Cupertino has given warning to suppliers that China is enforcing a customs regulation which may lead to the refusal of import and export requests.
According to Reuters, Pegatron informed suppliers that China has begun enforcing a long-standing rule that parts and components made in Taiwan must be labeled as being made either in “Taiwan, China” or “Chinese Taipei”. So far, the rule has been “more honored in the breach than the observance”.
However, reports indicate China is now being strict on compliance. Currently, reports conflict concerning whether shipment delays are affecting both imports and exports to and from China. Or, rather, only movements of parts between Taiwan and China.
Looking at the Label
Though Apple products have the label “Designed by Apple in California, Assembled in China”, it is possible that shipping documents would indicate they are from Taiwan. According to reporter Ben Lovejoy, It is likely that only a change on paperwork would need to be seen for the permission of shipments. Should it be merely an issue of paperwork, it would be easy to resolve. However, things may become more complicated should any of the components see the label “Made in Taiwan”.
According to reports from DigiTimes Asia, Pegatron has denied both reports that Chinese customs officials are holding shipments for scrutiny. According to Pegatron, production at all its China sites and shipments remain normal. However, while production at facilities should remain normal, as this is a shipping issue, what the company means by shipments from China is unclear, as the information relies on whether or not Pegatron views Taiwan as a part of China.
With it being an already tumultuous journey for the iPhone 14 this year, this news is likely not to help things much. While there have been plenty of arguments concerning Apple’s supply chain, this is likely only going to further complicate matters at a time when Cupertino needs to ramp-up iPhone 14 production.
Tags: Apple, China, supply chain
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