The headline is a bit misleading: Apple’s ties with China remain strong. But it has asked its Chinese supplier, Goertek, to set up production facilities in Vietnam. The logistics are changing in reaction to the US-China trade war and because of rising labour costs in China. Vietnam is cheaper and yet keeps production close to China. Other tech companies are following suit, however President Trump has recently threatened to impose tariffs on Vietnam, which could threaten these shifts.
Why does this matter? This piece is a great breakdown of a large scale trend: the trade war is pushing US companies to include other Asian countries in the final links of the supply chain, whilst maintaining their use of China where they can. Vietnam seems to the big winner at the moment, though others could follow. Needless to say the US is not seeing any onshoring.
(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)
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