Apple Explores Brazil Factory Expansion to Tackle Asia Tariffs

Apple Inc. is considering expanding its Foxconn factory in Brazil to counter rising Asian production costs due to new tariffs. Over half of Apple’s smartphone shipments currently come from China, which faces high tariffs. The Jundiai facility, already involved in iPhone assembly, offers a more feasible production environment given Brazil’s lower export duties to the U.S.

Apple Inc. is reportedly contemplating an expansion of its operations at the Foxconn facility located in Jundiai, Sao Paulo. This strategic move aims to mitigate the rising production costs in Asia, particularly in light of new tariffs imposed by the United States. According to a report from Brazilian Exame magazine, the company is responding to significant cost pressures resulting from tariffs that impact its major suppliers in China and India.

Currently, over 50% of Apple’s smartphone shipments are sourced from China, which has incurred steep reciprocal tariffs following the April 2 announcement. To further complicate matters, China recently implemented a 34% tariff in retaliation. India, on the other hand, has rapidly increased its device production capabilities and, facing a 26% levy, is also poised to experience production disruptions.

The Jundiai facility of Foxconn has long been an Apple partner, assembling base models of the iPhone 13 to 15, and it has recently received authorization to produce the upcoming iPhone 16 model. With the current export duties set at a mere 10% to the United States, Brazil presents an increasingly attractive alternative for Apple in its supply chain strategy.

Apple’s potential expansion in Brazil underscores its strategic response to escalating tariffs affecting its Asian supply chains. By leveraging Foxconn’s established operations in Jundiai, Apple aims to sustain its production efficiency and continue meeting market demands despite the turmoil in China and India. The decision reflects a broader shift in Apple’s manufacturing strategy as it seeks to diversify its production locations and mitigate potential risks from trade regulations.

Original Source: breakingthenews.net