A recent report from Reuters indicates that Luxshare, an Apple supplier, is contemplating relocating some of its production facilities outside of China, including possible operations in the United States, in response to the tariffs imposed by Trump.
During a conference call with analysts, Luxshare co-founder Wang Laichun shared insights regarding this potential shift. She noted that Trump’s tariffs are expected to “have minimal impact on profits and revenue” for Luxshare since only a small portion of their finished products are exported to the U.S.
Currently, Luxshare operates factories and research facilities in China, Malaysia, Thailand, Vietnam, and the United States. The company is involved in the assembly of various iPhone models and the production of AirPods and the Apple Watch.
“If there is a solid commercial guarantee and we are able to perform a comprehensive assessment, we will consider localizing certain products to cater to the U.S. market,” Wang stated during the discussion. She emphasized that investments in North America would need to account for “long-term development and safety considerations,” and primarily target “products manufactured with a high level of automation.” The company is also looking into increasing its investments in Southeast Asia.
The company requires 1 to 1.5 years to establish and initiate a new production line in locations where it already has a facility, she mentioned.
When asked if the tariffs would be shared between businesses in the supply chain and consumers, Wang responded:
“So far, hardware manufacturers have not absorbed the costs of tariffs or logistics warehousing… This has never occurred, and I expect it to remain the same in the future.”
However, she did express concerns that customers may pursue lower prices due to the tariffs, stating, “Customers have always collaborated with suppliers to enhance competitiveness.”
DMN’s Take
Luxshare’s statements do not provide a clear picture of their strategic plans in light of Trump’s tariffs. This ambiguity is expected, given the unpredictable nature of the tariffs’ implementation.
The notion of relocating any production to the United States appears to be Luxshare’s vague appeal to Trump in hopes of gaining immediate relief from these tariffs, without detailing a solid investment strategy for U.S. operations.
Furthermore, it seems that Luxshare is primarily interested in transitioning production that is heavily reliant on “a significant degree of automation” to the U.S. This shift may not result in the kind of job creation that Trump envisions his tariffs will foster.
