U.S.-China Tariff Eases, Apple Slows Supply Chain Shift

On May 12, the United States and China released a joint statement announcing a new development in their ongoing tariff negotiations. Under the agreement, the U.S. will suspend the implementation of a 24% tariff for an initial 90-day period, while maintaining the authority to impose the remaining 10% tariff on select goods under Executive Order No. 14257. This policy adjustment is expected to have a significant impact on Apple's global product shipments.

In light of this progress, Apple's global production footprint and logistics strategies have drawn increased attention. Industry analysts suggest that while the temporary easing of trade tensions may reduce short-term operational pressures, Apple's broader strategy to diversify its manufacturing ecosystem remains unchanged in the long term. The pace of relocation may slow temporarily, but the shift toward a geographically distributed production model continues.

From an operational perspective, diversification enables Apple to better manage costs and enhance overall efficiency. As major global markets accelerate efforts to establish localized production capabilities, Apple is aligning with regional manufacturing trends. The challenge going forward lies in managing the costs associated with this diversification and determining how these costs are absorbed within the production chain.

Earlier in May, during Apple's earnings call, CEO Tim Cook confirmed the company's ongoing adjustments to its manufacturing capacity in response to evolving tariff policies. In Q2, most iPhones destined for the U.S. market will be produced in India, while nearly all iPads, MacBooks, Apple Watches, and AirPods for the U.S. will originate from production facilities in Vietnam.

For non-U.S. markets, Cook noted that China remains the primary manufacturing base for the majority of Apple's products. Analysts also point out that while iPhone production is expanding in India to meet U.S. demand, production facilities in China remain strategically important, particularly for markets like Japan, South Korea, and the European Union, where China-based manufacturing continues to offer strong cost advantages.

A long-time executive within Apple's Asia-based production network acknowledged that the latest trade developments bring "a moment of relief." With trade tensions temporarily easing, pressures to rapidly expand new overseas production lines—particularly in areas like component manufacturing and device assembly—are expected to subside in the near term. However, looking ahead, Apple's production strategy will continue to evolve based on the distinct needs and regulatory environments of both the U.S. and Chinese markets.