Your next iPhone might come from Vietnam as manufacturers seek to avoid trade war fallout

[nanoguy]

Why it matters: While Trump has his eyes set mostly on China, It looks like the sparring has provided an excellent window of opportunity for small countries like Vietnam to emerge as new technological centers in Asia. India may have looked like the obvious winner until today, but the way it is governed might be working against that goal, which happens to be a boon for smaller countries to the East.

It's no secret that big tech is scrambling to move production out of China: PC makers like Microsoft, Dell, Lenovo and HP, console manufacturers like Nintendo and Sony, Amazon with Kindle and Echo, Google, Samsung and Apple with their tablets and phones. Some of them have even went to publicly denounce Trump's tariffs on $300 billion worth of consumer electronics that they're making in China.

For a while India looked it would take over a large piece of that pie, with Apple contracting Foxconn, Pegatron and Wistron to make lower end iPhones and Samsung opening the world's largest phone manufacturing facility in the country.

Big tech has also set its eyes on other countries like Indonesia, Thailand, and most importantly, Vietnam. The NY Times says manufacturers in the country are in talks with tech giants and looking to scale up their capacity.

The challenges mostly revolve around the bill of materials, many of which are imported from China. A notable example is plastic, which is 5 to 10 percent more expensive in Vietnam because until now there hasn't been an incentive for local suppliers to make more of it.

United States and China will have another round of negotiations in Shanghai this week, but many expect the trade war to have lasting effects that will see manufacturers gradually move their operations out of the country. Couple that with the fact that Vietnam is working hard on developing its infrastructure and signing trade deals with the E.U., and you can see why big tech would be interested in moving there.

There are more reasons to think your next iPhone might be assembled in Vietnam, but perhaps the most telling is that Foxconn has already acquired a piece of land in the country to set up shop. Apple is not likely to move all production anytime soon, but this a signal that we may have reached peak China.

Rival Samsung is apparently putting together half of its phones and accessories sold worldwide in Vietnam using 100,000 people. Those accounted for over $70 billion in sales, and convinced several of its South Korean suppliers to set up their own presence there as well.

Permalink to story.

https://www.techspot.com/news/81238-next-iphone-might-come-vietnam-manufacturers-seek-avoid.html

 

[Vulcanproject]

If you can't beat them in a war then utilise their cheap labour to feed your economy

 

[Ludak021]

There will be tariffs on every country that pisses Trump off and doesn't do what he wants them to do. Moving companies is just a costly temporary solution. What we all know is that those jobs aren't coming back to USA, and US citizens will pay the brunt of the tariff.

 

[p51d007]

Vietnam is just a puppet of China.

 

[QuantumPhysics]

If you can't beat them in a war then utilise their cheap labour to feed your economy

Their desperate women too...

 

[EClyde]

Share the wealth

 

[psycros]

Vietnam is just a puppet of China.

All of Asia scratches when China has an itch and its been that way for 30 years. The policy of containment was working just fine until the western ruling elites decided quick money was more important than long-term security. All market protections in America and most of Europe were systematically eliminated and already-wealthy companies shifted the bulk of America's blue-collar prosperity to southeast Asia. China was the most aggressive when it came to attracting investment and intentionally destroying foreign industries via "dumping". When businesses say they have no choice but to use Chinese manufacturing because that's the only place they can get what they need, this is why: greedy, short-sighted American companies literally tore down most of the country's manufacturing infrastructure. You can thank George Bush Sr. and Bill Clinton for finally breaking the back of American industry by destroying all barriers to offshoring jobs. Trump understands that a nation is only as strong as its economy and he's always been an "adapt or die" kind of entrepreneur. He knows that ultra-profitable businesses aren't going to be hurt by a slight drop in revenue due to finally paying a living wage and being less able to dodge taxes. Some tech businesses are STILL benefiting from corporate welfare started in the 80's, just as the oil industry - astoundingly - still receives considerable subsidies. This is bad for the average working American who doesn't understand the unsustainable economics of unfettered capitalism. Its also a bad idea for any democratic country to actively enrich its totalitarian rivals, as evidenced by the rise of a belligerent China who invents nothing itself but steals all its technology from stupid westerners.

 

[OptimumSlinky]

Trump understands that a nation is only as strong as its economy and he's always been an "adapt or die" kind of entrepreneur.

Given his non-stop bankruptcies, I'd say he's just the "die" kind.

 

[PEnnn]

" Trump understands that a nation is only as strong as its economy and he's always been an "adapt or die" kind of entrepreneur"

Tell that to the farming industry, who are now dependent on 16 billion (and counting) corporate welfare. Ruining a farming economy and using tariffs as a weapon is a sign of knowing nothing or anything about how economics work.
This is the same guy who bankrupted a casino after all.... among other enterprises.

 

[Mr Majestyk]

What's to stop the orange haired m0r0n from starting a trade war with Vietnam. He wants to start one with Europe. As though he'll take kindly to manufacturing moving from China to another non-US country. Would be hilarious to see billions spent on new factories elsewhere only to new huge tariffs levied again.

Trump is the gift that just keeps giving.

 

[Graloc25]

All of Asia scratches when China has an itch and its been that way for 30 years. The policy of containment was working just fine until the western ruling elites decided quick money was more important than long-term security. All market protections in America and most of Europe were systematically eliminated and already-wealthy companies shifted the bulk of America's blue-collar prosperity to southeast Asia. China was the most aggressive when it came to attracting investment and intentionally destroying foreign industries via "dumping". When businesses say they have no choice but to use Chinese manufacturing because that's the only place they can get what they need, this is why: greedy, short-sighted American companies literally tore down most of the country's manufacturing infrastructure. You can thank George Bush Sr. and Bill Clinton for finally breaking the back of American industry by destroying all barriers to offshoring jobs. Trump understands that a nation is only as strong as its economy and he's always been an "adapt or die" kind of entrepreneur. He knows that ultra-profitable businesses aren't going to be hurt by a slight drop in revenue due to finally paying a living wage and being less able to dodge taxes. Some tech businesses are STILL benefiting from corporate welfare started in the 80's, just as the oil industry - astoundingly - still receives considerable subsidies. This is bad for the average working American who doesn't understand the unsustainable economics of unfettered capitalism. Its also a bad idea for any democratic country to actively enrich its totalitarian rivals, as evidenced by the rise of a belligerent China who invents nothing itself but steals all its technology from stupid westerners.

"China who invents nothing itself but steals all its technology from stupid westerners" really? Next I guess you'll be claiming they stole the invention of gunpowder! Just because you get to patent something doesn't prove it was your invention, eg the telephone, apple pie, et al.

 

[amghwk]

Who elected Trump anyway?

 

[Nero7]

Who elected Trump anyway?

No worries, for sore losers there will always be smartphones from Vietnam for you.
You get a free Hanoi Hannah ringtone as well to wake you up in the morning.

 

[IAMTHESTIG]

Kinda funny to watch everyone hate on Trump. I don't particularly care for him but he is sure as hell mixing shiznit up and China has indeed been taking advantage of the US for a long time. It's about time someone does something about it - maybe not this, but at least something is happening. We'll see what happens. There are too many variables to really predict the end, though everyone sure tries to.

If you like your cheap Chinese electronics you better get them now... I do actually, got a $30 pair of wireless ear buds that actually are good. I doubt this will still be the case two years from now.

 

[wiyosaya]

Vietnam is just a puppet of China.

All of Asia scratches when China has an itch and its been that way for 30 years. The policy of containment was working just fine until the western ruling elites decided quick money was more important than long-term security. All market protections in America and most of Europe were systematically eliminated and already-wealthy companies shifted the bulk of America's blue-collar prosperity to southeast Asia. China was the most aggressive when it came to attracting investment and intentionally destroying foreign industries via "dumping". When businesses say they have no choice but to use Chinese manufacturing because that's the only place they can get what they need, this is why: greedy, short-sighted American companies literally tore down most of the country's manufacturing infrastructure. You can thank George Bush Sr. and Bill Clinton for finally breaking the back of American industry by destroying all barriers to offshoring jobs. Trump understands that a nation is only as strong as its economy and he's always been an "adapt or die" kind of entrepreneur. He knows that ultra-profitable businesses aren't going to be hurt by a slight drop in revenue due to finally paying a living wage and being less able to dodge taxes. Some tech businesses are STILL benefiting from corporate welfare started in the 80's, just as the oil industry - astoundingly - still receives considerable subsidies. This is bad for the average working American who doesn't understand the unsustainable economics of unfettered capitalism. Its also a bad idea for any democratic country to actively enrich its totalitarian rivals, as evidenced by the rise of a belligerent China who invents nothing itself but steals all its technology from stupid westerners.

Interestingly, we agree on this. The guy who got it all started with China was Richard Nixon; whether that says something about what has happened since then is a matter of opinion.

Unfortunately, I do not see things changing in the near future. IMO, the world's economic system is totally f'd up; and until humanity figures that out and finds a way to make things more equitable for everyone, nothing, absolutely nothing will change.

If there is one thing that the world's prevalent economic systems do very well, IMO, it is exploiting everyone and everything. Metaphorically speaking, the world's prevalent economic systems reward taking all the fish, making an obscene profit on those fish, and then everyone wonders why there are no more fish.

Kinda funny to watch everyone hate on Trump. I don't particularly care for him but he is sure as hell mixing shiznit up and China has indeed been taking advantage of the US for a long time. It's about time someone does something about it - maybe not this, but at least something is happening. We'll see what happens. There are too many variables to really predict the end, though everyone sure tries to.

If you like your cheap Chinese electronics you better get them now... I do actually, got a $30 pair of wireless ear buds that actually are good. I doubt this will still be the case two years from now.

IMO, Trump has no fing clue what he is doing. Trump is pretending to do something while those most effected by his asinine policies are those who voted for him. Instead of changing tax laws to make it more profitable for US companies to keep jobs in the US, he is waging this asinine tariff war. However, even changing the tax laws will not change the basis of the problem, which is, IMO, the world's prevalent economic systems.

As long as people remain sheep and buy everything that marketing departments tell them they have to have to be a legitimate member of humanity, that will also enable situations like this. IMO, there is a problem out there that is far bigger, and 45's half-a$$ed attempts are nowhere near solving the problem.

That said, I won't say much else, however, I will say that I know of at least one other industry that is finding a way around his dumb-a$$ tariffs through at least one other, non-Asian country that does not have a tariff war going on with China. Just like tax laws, the loopholes are turning this into a wack-a-mole game.

 

[Uncle Al]

Vietnam is just a puppet of China.

You've got some bad information on that one. Chinese consider Vietnam backwards and won't share technology directly with them. The Vietnamese (especially their leadership) do not trust China and avoid them at every turn, which is why they have been much slower to evolve. Actually, throughout Asia there are very few countries that desire a relationship with China. Vietnam has a very good work force that are adaptive and learn quickly. They don't mind repetitive tasks and actually excel at them so companies like Apple will benefit from the relationship. I spent some time a few years back teaching in Vietnam and contrary to what many remember from the war, they are very warm and receptive people although their dietary habits are a bit hard to appreciate .... LOL

 

[tkabou]

There will be tariffs on every country that pisses Trump off and doesn't do what he wants them to do. Moving companies is just a costly temporary solution. What we all know is that those jobs aren't coming back to USA, and US citizens will pay the brunt of the tariff.

So it's OK if every other country taxes/tariffs the USA but it's a crime when the US does it to other countries? Stop being a [Trump] hater, this is business not politics. It's about time somebody did something about this inequity! Remember this is as much about being fair (reciprocal trade/tariffs) as it is about mandatory IP transfers to China. Trump Derangement Syndrome runs deep, and everyone on the left seems to forget about the actual reasons for why the administration is waging this "economic warfare" with China.

 

[tkabou]

" Trump understands that a nation is only as strong as its economy and he's always been an "adapt or die" kind of entrepreneur"

Tell that to the farming industry, who are now dependent on 16 billion (and counting) corporate welfare. Ruining a farming economy and using tariffs as a weapon is a sign of knowing nothing or anything about how economics work.
This is the same guy who bankrupted a casino after all.... among other enterprises.

Trump didn't leave the farming industry behind like some other president would, he instead offered them compensation for their trade losses. Talk about caring and not shafting them. Hate all you want but it doesn't change the fact that he's made out of money and a good businessman. Sometimes bankrupting a business is the best fiscal solution -filing for chapter isn't a new thing and Trump isn't the first one to use it. Get over it already.

 

[wiyosaya]

Trump didn't leave the farming industry behind like some other president would, he instead offered them compensation for their trade losses. Talk about caring and not shafting them. Hate all you want but it doesn't change the fact that he's made out of money and a good businessman. Sometimes bankrupting a business is the best fiscal solution -filing for chapter isn't a new thing and Trump isn't the first one to use it. Get over it already.

https://www.forbes.com/sites/johnbrinkley/2019/07/31/trump-fails-farmers/#3b3ce67c6357

 

[OptimumSlinky]

Hate all you want but it doesn't change the fact that he's made out of money and a good businessman. Sometimes bankrupting a business is the best fiscal solution -filing for chapter isn't a new thing and Trump isn't the first one to use it. Get over it already.

He repeatedly over inflates his net worth, his businesses have lost more money than they've made, and he'd be wealthier today if he had just stuck his inheritance in an index mutual fund and forgotten about it. He's a terrible businessman who uses bankruptcies to get out of paying the contractors he hires for the work they've completed for him. Compared with any number of actual billionaire businessmen (Bezos, Buffett, Musk, Hanauer, etc.), Trump is a scummy joke, hence his fragile ego and overcompensation (gold toilets, anyone?).

 

[Markoni35]

Isn't it interesting all the mainstream corporations are avoiding India and Africa? Liberals (which are mostly sponsored by the tech industry) may say there are no differences between races and nations in work ethics and dedication. But those are just words. Their decisions tell quite a different story. They'd rather open a factory in North Korea than in Africa or India.

 

[captaincranky]

"China who invents nothing itself but steals all its technology from stupid westerners" really? Next I guess you'll be claiming they stole the invention of gunpowder! Just because you get to patent something doesn't prove it was your invention, eg the telephone, apple pie, et al.

The Turks invented towels too, but let's move on. After all, we're supposed to be tech wizards of the 21st millennium.

China is a repetition of the Japanese success story. 60 years ago, "made in Japan", was a cruel joke. Their goods were nothing but cheap copies of American made product. Then a funny thing happened. they got savvy and started their march toward technological supremacy. Can you say, "Nikon"? Can you say Canon? (To name just two). Hell, the trolley cars in Philly were made by Kawasaki. (After Brill and Budd went out of business trying to compete).

Then boyz & gurlz, a funny thing happened. Japan's work force became highly skilled and highly paid. And now, Nikon has to have their cameras built in Thailand, because they can't afford to build them in Japan any more.

 

[captaincranky]

....[ ]....This is the same guy (Trump) who bankrupted a casino after all.... among other enterprises.

There's some fact in what yhou're saying. But Trump didn't bankrupt his casino single handedly.

Atlantic City, NJ thought it would enjoy the privilege of being, "The Las Vegas of the East Coast", forever. Then, other cities and states realized they could make money on gambling, and built their own casinos. I suppose that the powers that be in AC thought they'd be "the only game in town" forever. Wow, were they ever wrong.

See for yourself:

https://www.worldcasinoindex.com/guide/failed-atlantic-city-casinos/

Five casinos have closed in Atlantic City since 2014!

https://philly.curbed.com/2016/8/4/12376514/trump-taj-mahal-closed-atlantic-city-casinos

 

[Nero7]

The Turks invented towels too, but let's move on. After all, we're supposed to be tech wizards of the 21st millennium.

China is a repetition of the Japanese success story. 60 years ago, "made in Japan", was a cruel joke. Their goods were nothing but cheap copies of American made product. Then a funny thing happened. they got savvy and started their march toward technological supremacy. Can you say, "Nikon"? Can you say Canon? (To name just two). Hell, the trolley cars in Philly were made by Kawasaki. (After Brill and Budd went out of business trying to compete).

Then boyz & gurlz, a funny thing happened. Japan's work force became highly skilled and highly paid. And now, Nikon has to have their cameras built in Thailand, because they can't afford to build them in Japan any more.

For a supposed tech wizard of the 21st millennium I'd expect a bit more than to explain things with: "funny thing happened"

Truth to the matter is, Japan lost WW2 and became a US vassal just like Germany. They were pushed to become those powerhouses by the USA.

It isn't some funny miracle and neither is it their accomplishment that they're such powerhouses today, afterall they were both bombed back into the stone age.

Socialists did what they always do, they redistribute wealth. Geopolitics and stuff, USA is an Empire much like the British Empire used to be. Its just that the public isn't made aware of it.

Now that Germany is openly rebelling against the USA, the USA will show them their place. That wasn't necessary as much with Japan, they fell in line very quickly. Some shock & awe demonstrations behind closed doors.

China and Trump get along very very well. They're good friends. Its just PR that they don't get along in public. Behind closed doors deals are being made and relations are better than ever. Election campaigns are ongoing so you gotta look tough. Same with US and Russian relations. They too get along very well. Vietnam won the war, don't pretend that Russia wouldn't win it too.

 

[TempleOrion]

Isn't it interesting all the mainstream corporations are avoiding India and Africa? Liberals (which are mostly sponsored by the tech industry) may say there are no differences between races and nations in work ethics and dedication. But those are just words. Their decisions tell quite a different story. They'd rather open a factory in North Korea than in Africa or India.

Err, your thinly disguised racism is pretty poor. Read the article: huge investment in India from Apple and Samsung and others; and Chinese investment in the African continent is colossal. Can you cite where 'they' said "they'd rather open a factory in North Korea than in Africa or India"? No, didn't think so... because you're just making up BS to suit your obvious agenda.

There are differences between nations, not 'races' (of which there is only one). No-one in the Mao era predicted China's incredible rise or the relative decline of the USA. The African Union is the only polity that has a demographic advantage now birth rates have declined all over the world - whether they are able to leverage their young talent is another story, depending on a myriad of variables that none of us can foresee.