Apple Flew Planeloads Of Products To US To Avoid Tariffs
Apple has taken drastic action to avoid tariffs and avoid price hikes, flying at least five planeloads of products out of India and China before the tariffs went into effect.
President Trump has unveiled sweeping tariffs on allies and rivals alike, with China, India, and Vietnam among those hard-hit. The US hit China with a 34% tariff, while levying a 27% tariff on India and a whopping 46% on Vietnam. The latter two are particularly devastating, as many companies—including Apple—have been moving production out of China to India and Vietnam specifically to avoid the repercussions of a US/China trade war. With Trumps tariffs hitting those countries, companies are left scrambling now that their backup plans have been destroyed overnight.
Apple is doing its best to mitigate the effects of tariffs, and avoid raising prices as long as possible, by flying in five planeloads of iPhones and other products before the tariffs hit, according to Times of India.
“The reserves that arrived at lower duty will temporarily in insulate the company from the higher prices that it will need to pay for new shipments under the revised tax rates,” the outlet’s source explained.
“Any price hike to offset this impact cannot be limited to just the US market, but will have to be taken across key global regions, including India,” the source added.
A Break From Apple’s Traditional Supply Chain Management
Apple’s decision to stockpile products is a notable break from its traditional supply chain management. Long before he became CEO, Tim Cook was credited with revolutionizing the company’s supply chain, reducing its glut of on-hand products to just a few days worth of product pipeline.
Apple’s supply chain has long been a source of envy for many other companies, giving the iPhone make the ability to empty out old models as new ones are being released. In contrast, companies with less efficient supply chains are often left with a significant inventory of obsolete products, forcing them to sell them at a discount and cannibalize sales of the newer models.
Apple’s decision to break with its normal supply chain process is just another example of the unprecedented situation many companies now find themselves in as a result of Trump’s trade wars.
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