Analyst Ming-Chi Kuo has released a new investor note which looks into all things supply chain. As part of that note Kuo said that he doesn’t expect the ongoing trade war between the United States and China to impact Apple hardware prices. This as the United States imposes tariffs on imports from China.

Apple has been seeking to get an exemption to those tariffs but that has so far been denied. As a result, it was suspected that Apple would have to increase its prices to accommodate the new tariffs, although Kuo beliefs that Apple will instead speak to absorb the costs itself.

United States President Trump said last week that a 10% tariff would be placed on an additional $300 billion-worth of products coming from China, starting September 1st. However, Kuo believes that Apple made “proper precautions” for that eventuality and that it will “absorb most of the additional costs” for now.

Moving forward, Kuo is also of the belief that Apple’s non-Chinese production lines will be able to meet “most of the demand from the U.S. markets” within a timescale of two years.

1. iPhone. Expanding non-Chinese production capacity is challenging due to the low degree of production automation. We expect that non-Chinese production locations to meet U.S. market demand in 2020.

2. iPad. It’s not difficult to expand non-Chinese production capacity to meet U.S. demand because of the higher degree of production automation and the smaller U.S. market share.

3. Mac. Though its degree of production automation is higher than the iPhone’s, the Mac’s non-Chinese production locations can’t meet demand from the U.S. market until 2021 because of higher market share of U.S. market.

4. Apple Watch. We expect there will be non-Chinese production locations, starting in 2020.

5. AirPods. We estimate that the change of AirPods’ internal design from SMT to SiP will enhance the level of production automation.

Regardless, all eyes will continue to be on President Trump and his battle with China. Apple CEO Tim Cook has already suggested that Apple’s production efforts are sufficiently globalized to be able to withstand such tariffs, however.

(Via: 9to5Mac)

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