Apple Asks Suppliers to Change Labeling on Shipments to China

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Apple ($NASDAQ:AAPL) has asked suppliers to change the labeling on shipments from Taiwan to China in an effort to avoid scrutiny and being held up, according to Nikkei. The Japanese news outlet, citing sources familiar with the matter, reported that Apple has asked suppliers to label the shipments as being made in “Taiwan, China” or “Chinese Taipei.” This could potentially affect Apple’s market and earnings in the long term if the company is unable to avoid scrutiny from the Chinese government.

However, it is unclear at this time what the full extent of the impact will be.

Market Reaction

According to the Wall Street Journal, on Friday Apple asked its suppliers to change the labeling on shipments bound for China, in order to comply with new Chinese regulations. The new regulations require that products sold in China have labels that show the country of origin. Apple’s stock opened at $163.2 and closed at $165.4 on Friday.

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Summary

The change comes as the U.S. and China are engaged in a trade war, with each side imposing tariffs on the other’s goods. cars, and the U.S. If the U.S. tariffs are imposed, they would likely increase the cost of iPhones for Chinese consumers. Apple has asked its suppliers to change the labeling on shipments to China so that they would be classified as “parts and accessories,” which are not subject to the proposed tariffs, according to a report in The Wall Street Journal. The move could help Apple avoid a price increase for its iPhones in China, but it is not clear if the suppliers will be able to make the change in time. The Journal report said that Apple is “racing to meet a deadline” set by the U.S. government for the imposition of the tariffs.