New case study by Arnold Schuh and Daniela Huber: Apple Inc.’s dilemma: Relocating global supply chains out of China
The case describes the impact of the US-China trade war on Apple Inc.’s operations in China.
Apple’s bet on the “cheap China” sourcing model means that 90% of the assembly happens in China. In 2018, President Trump began to introduce step-by-step duties on Chinese imports ending up with tariffs of 7.5% and 25% covering about $360 billion worth of imports. Apple managed to get exemptions for iPhone imports from China so far but not for component imports. As President Trump was advancing the decoupling of the US and Chinese economies, Apple had to prepare for mounting difficulties. What are the risks of a supply chain relocation out of China? What are Apple’s options in adjusting its China-centered global supply chain?