Apple has been making efforts to diversify its supply chain in recent years, but its heavy dependence on China is causing concern as it gets caught up in the US-China trade war once again.
While some iPhone production has been moved to India and Vietnam, it’s not enough. China is resisting Apple’s attempts to shift production elsewhere.
However, Brazil could be a hidden gem in Apple’s supply chain amidst the current economic uncertainty.
Apple recently received a reprieve from the high tariffs imposed on China, but the Trump Administration is determined to impose new tariffs on semiconductors and electronics.
Imports from India and Vietnam faced 26% tariffs until recently, while China’s tariffs are still as high as 145%. Brazil, on the other hand, has only faced a 10% baseline tariff.
Apple has been producing some standard-model iPhones in Brazil for a few years to cater to the local market with high import duties on electronics. This move could also help Apple enter the US market.
Reports suggest that the iPhone 16e is being produced in Brazil and labeled as “Assembled in Brazil – Brazilian Industry.” This could lead to lower prices for locally produced models due to tariff exemptions.
Importing an iPhone 16e from Brazil to the US would only incur a 10% tariff, half of what Apple pays for iPhones imported from China.
Overall, Brazil’s lower tariffs on US imports could benefit Apple as it navigates the challenges of the US-China trade war.
