What is the way out for Apple before Trump's reciprocal tax?

For the first time, Apple wants to include iPhone 16 Pro models in the list of products manufactured in Brazil. Photo: Tuan Anh .

Specifically, the American corporation is considering the possibility of expanding its iPhone assembly line in Brazil, right after the administration of US President Donald Trump issued a series of new tariffs targeting imported goods from many countries, including China. With most of its products assembled in the billion-people country, the company now faces a tax rate of up to 54% when bringing goods into the US.

In response, it appears that Apple is seriously considering expanding iPhone production capacity in Brazil, where the US currently imposes a 10% tariff, compared to 26% for India and 54% for China.

Specifically, according to Brazilian magazine Exame , Apple is planning to upgrade and expand capacity at existing factories in this South American country.

The American corporation began assembling products in Brazil in 2011. At that time, the company established a production facility in the state of São Paulo through cooperation with Foxconn - Apple's long-time assembly partner. However, the production capacity here is still very limited and only focuses on some basic iPhone lines to serve domestic demand.

Exame 's source said that the process of evaluating the expansion of production capacity in Brazil was started by Apple last year, along with upgrading the machinery system and industrial processes at the factory.

Recently, Brazil's telecommunications regulator - Anatel - also officially granted Apple and Foxconn Brazil permission to assemble the iPhone 16 model in this country. Previously, the company assembled the iPhone 13, iPhone 14 and iPhone 15 lines in Brazil. What's special is that Apple is said to be planning to include the highest-end iPhone 16 Pro product line for the first time in the list of devices assembled here.

If the plan is successfully implemented, iPhones assembled in Brazil will not only be limited to the domestic market, but also be used for direct export to the US. This could help Apple save a significant amount of tax.

According to 9to5mac , Apple's stock has dropped more than 10% since the tariffs were announced, causing the company's market capitalization to evaporate by $300 billion . Not only Apple, many other American technology corporations such as Nvidia are also in a similar situation. Nintendo alone has postponed its plans to launch the Switch 2 gaming console in the US market, citing "tax uncertainties" as the reason.

On the other hand, with a new 26% tax imposed on electronic products imported from India, New Delhi's ambition to become a global iPhone manufacturing hub is also at risk.

While this is the lowest level among Apple’s three largest manufacturing bases, Indian officials are still concerned. Speaking to The Indian Express , a government source said that while there is hope for a bilateral trade agreement (BTA) to ease the situation, the immediate impact on India’s electronics industry and exports is inevitable.

The Indian Cellular and Electronics Association (ICEA) warns that some countries are emerging stronger with more favorable trade policies. Brazil, Türkiye, Saudi Arabia and the UAE are all taking advantage of tariffs as low as 10%. Even the Philippines is facing a 17% tariff.

ICEA said Saudi Arabia and the UAE are emerging thanks to their special economic zones, competitive labor costs and lean manufacturing models. Even Brazil, previously considered a “difficult” trading partner, is now attracting interest thanks to “favorable treatment from the US.”

Source: https://znews.vn/apple-tim-loi-thoat-de-ne-thue-my-post1543463.html