[News] Apple’s Supply Chain Reality: What U.S. Tariffs Overlook

Amid escalating U.S.-China tech tensions and geopolitical risks, Chip War author Chris Miller and Vishnu Venugopalan—a Harvard fellow and Indian Administrative Service officer—recently co-authored a report titled  “Apple’s Supply Chain: Economic and Geopolitical Implications,” analyzing Apple’s evolving supply chain strategy.

Miller and Venugopalan note that China has become central to Apple’s final assembly operations, and the company sources many components from within the country. However, they point out that Chinese-owned firms are mostly involved in lower-value segments, while higher-value components—even those produced in China—are typically manufactured by Japanese, Taiwanese, or U.S.-owned factories.

Meanwhile, Miller and Venugopalan also mention that despite growth in India and Southeast Asia, China remains Apple’s primary production hub, and the shift to these region is less dramatic than “decoupling” headlines suggest.

Southeast Asia and India’s Current Role in Apple’s Supply Chain

As their report indicate, India and Southeast Asia have entered select parts of the Apple supply chain, particularly electronics assembly. However, areas such as printed circuit boards, packaging, and especially precision manufacturing remain largely concentrated in China.

Notably, the authors highlight that many parts of Apple’s supply chain remain under the control of non-Chinese firms, even though much of the manufacturing takes place in China. The ongoing presence of Taiwanese, U.S., and Japanese companies operating factories there reflects their retained expertise and capabilities—key reasons they have not been displaced by Chinese-owned competitors.

Why U.S. Tariffs Miss the Bigger Picture in Apple’s Supply Chain

The report also comments on the recent tariff policy promoted by Trump. According to the authors, analyzing a device based solely on its country of assembly—and imposing tariffs accordingly—is often misleading. They argue that if tariffs only prompt companies to shift final assembly from China to another country without altering the broader supply chain, the overall impact would be minimal, since final assembly for devices like smartphones typically costs around $10—a small fraction of the total sales price. The authors emphasize that understanding the economic implications of manufacturing for a company like Apple requires a deeper analysis of its entire supply chain, not just the location of final assembly.

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(Photo credit: Apple)