Apple supplier Luxshare says diversification strategy will mitigate impact of Trump tariffs
A key Apple subcontractor in China said the Trump administration's new tariffs are unlikely to affect its business thanks to ongoing efforts to diversify its customer base and manufacturing operations.
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Luxshare Precision Industry said it has been pre-empting geopolitical risks by integrating risk control into its strategic decision-making process, according to a report by state-backed media outlet Shanghai Securities News. The Shenzhen-based company added that it has expanded its client portfolio and diversified production locations, while pursuing independent innovation in core technologies.
In addition, Luxshare said tariffs are usually paid by importers under normal free on board (FOB) shipping arrangements. In international commercial law, FOB specifies at what point respective obligations, costs and risk involved in the delivery of goods shift from the seller to the buyer under the Incoterms standard published by the International Chamber of Commerce.
Luxshare is a significant contract manufacturer in Apple's supply chain, assembling a wide range of its key products including AirPods, iPhones and the Vision Pro mixed-reality headset.
The company's assessment comes after US President Donald Trump slapped an additional 34 per cent tariff on China, triggering a trade war that threatens to upend the global supply chain including Apple's supplier network.
Apple CEO Tim Cook seen on a visit to Luxshare Precision Industry in October 2023. Photo: Weibo
Luxshare's Shenzhen-listed shares fell more than 10 per cent to 31.88 yuan (US$4.38) on Monday, its lowest point year to date, following a 10 per cent drop on Friday.
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