Trump banning Huawei product in the US was not good news for China. As it restricted the world second largest smartphone makers from its biggest market. However, this doesn’t mean China can’t retaliate as they can ban Apple “world’s third-largest smartphone maker” in China.
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An analyst name Goldman Sachs estimated that if Apple is to be ban in China, it could lose 29% of its profits if China proceeds with the ban. China is responsible for 17% percent of Apple product sales, and such a ban could be awful news for Apple. All of this is just hypothetical as China doesn’t have to ban Apple for sure. However, banning them would be a statement to Trump and its administration that China won’t be bullied into decisions, and they can take a gutsy call as well.
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Apple planning to move its production to India
Another thing which needs to take into consideration is that Apple products are manufactured in China and the loss would be quite more than just 29% for Apple.
Although there is speculation Apple is looking at India for production and this would also help grow its market in India. However, Apple would face many immediate difficulties. Our analysts Goldman further says that such a move is only preferred if Apple is thinking of shifting permanently from China. If they do so, this would have a significant impact on China’s tech ecosystem and local labor.
However, Apple is not the only country who has built its products in China. There is a host of other American companies as well. China has increased its tariffs in recent years, and if this ban comes, many companies will surely move out of China. But this is terrible news for the consumer as they have to suffer in the trade war between USA and China.