The news comes as a new tariff of up to 25% on phones, laptops, and tablets imported to the U.S. from China is scheduled to come into effect by the end of June.
While tensions between China and the USA over an ongoing trade war see no signs of letting up, Foxconn - Apple's most prolific manufacturer - is prepared and capable to move its manufacturing (for Apple products to be exported to the U.S.) out of China should relations between the two countries become more tense, board nominee and semiconductor division chief Young Liu told an investor briefing in Taipei earlier this week. Assuming that Apple wouldn't pass on the added cost to consumers - which is a fair assumption - J.P. Morgan anticipates that Apple's gross margins would fall by 4% and that the company, as a result, would see a discernible drop in earnings.
Apple's production in China has become a major concern for investors as the Trump administration escalates threats to hit Beijing with new tariffs on about $300bn worth of Chinese goods.
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The US tariffs already affected some accessories sold by Apple, however, those hardly have a significant impact on its bottom line.
Apple has sufficient iPhone production capacity outside China to meet the needs of the United States market.
Hon Hai, better known as Foxconn, is a key manufacturing partner to Apple. Foxconn assures that it can fully support Apple if the ongoing trade war goes unpredictable. Analysts have also predicted that Apple leaves itself open as a valuable target.
Neither Apple nor Foxconn immediately responded to requests for comment.