Apple (NASDAQ:) is allegedly moving the manufacturing of its new Mac Pro computer from the United States to China, according to a Wall Street Journal report.
It came the day before the US and China announced at the G20 summit in Japan that they would re-start trade talks.
Both countries have slapped tariffs on billions of dollars of each other’s imports, which has disrupted global supply lines, upset markets and put a drag on global economic growth.
The Trump administration had threatened to impose new levies to cover nearly all imports from China and pressured Apple and other manufacturers to make their products in the United States if they want to avoid tariffs.
Last week, Apple asked its major suppliers to assess the cost implications of moving 15%-30% of its production capacity from China to Southeast Asia, according to a report.
“If true, this suggests to me that Apple has tremendous confidence that the US and China will be able to solve their trade dispute and do so in the near future,” DA Davidson analyst Tom Forte said in an email.
China is a key market for Apple as well as a major production center for its devices. The company got nearly 18 percent of its total revenue from Greater China in the quarter ended March.
“Like all of our products, the new Mac Pro is designed and engineered in California and includes components from several countries including the United States,” an Apple spokesman said. “Final assembly is only one part of the manufacturing process.”
Apple’s decision coincides with the end of tax subsidies that it got for making the desktop in a plant in Texas run by contract manufacturer Flex Ltd, according to the Journal.
“(This) serves as a reminder that, relative to the U.S., manufacturing in China remains a lower-cost alternative and benefits from an existing infrastructure, versus having to, potentially, rebuild one in the U.S”, Forte said.
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