Apple Asks Suppliers to Follow China Customs Rules Amid Sino-US Tensions: Report

Apple iPhone assembler Pegatron said its mainland China plant is operating normally.

By Reuters | Updated: 5 August 2022 17:04 IST

Photo Credit: Apple

Foxconn and Pegatron are ramping up manufacturing efforts to launch new iPhone models

Highlights

Apple is set to launch its new iPhone in September
Foxconn and Pegatron are the major suppliers for Apple
Pegatron said its mainland China plant is operating normally

Apple has asked suppliers to ensure that shipments from Taiwan to China comply with the latter's customs regulations to avoid them from being held for scrutiny, according to a Nikkei report on Friday.

Sino-US trade tensions have escalated following US House of Representatives Speaker Nancy Pelosi and a congressional delegation's visit to Taiwan.

The iPhone maker told suppliers that China had started enforcing a long-standing rule that Taiwanese-made parts and components must be labeled as made either in "Taiwan, China" or "Chinese Taipei", the report added, citing sources familiar with the matter.

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Apple did not immediately respond to a Reuters request for comment.

Apple iPhone assembler Pegatron said its mainland China plant is operating normally, in response to a media report that shipments to Pegatron's factory in China were being held for scrutiny by Chinese customs officials.

Taiwanese supply and assembly partners Foxconn and Pegatron are ramping up manufacturing efforts as Apple is set to launch its new iPhone in September.

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Meanwhile, Pelosi's trip To Taiwan coincided with US efforts to convince TSMC – the world's largest chip manufacturer, on which the US is heavily dependent – to establish a manufacturing base in the US and to stop making advanced chips for Chinese companies.

US support for Taiwan has historically been based on Washington's opposition to communist rule in Beijing, and Taiwan's resistance to absorption by China. But in recent years, Taiwan's autonomy has become a vital geopolitical interest for the US because of the island's dominance of the semiconductor manufacturing market.

Recently, the US Congress has passed the Chips and Science Act, which provides $52 billion (roughly Rs. 4,11,746 crore) in subsidies to support semiconductor manufacturing in the US. But companies will only receive Chips Act funding if they agree not to manufacture advanced semiconductors for Chinese companies.

© Thomson Reuters 2022

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