asia

WASHINGTON: US President Donald Trump’s ambition to see iPhones manufactured on American soil is clashing with the stark realities of global supply chains and decades of industrial evolution. Although Apple Inc. has pledged to invest US$500 billion in the US over the next four years and the Trump administration plans to impose tariffs of up to 145% on Chinese imports, experts say the idea of domestically produced iPhones remains unrealistic in the foreseeable future. The US lacks the complex ecosystem that supports iPhone production—one that includes a vast network of specialised suppliers, engineering talent, and logistical infrastructure found in Asia, particularly China. “Boston is over 500,000 people. The whole city would need to stop everything and start assembling iPhones,” said Matthew Moore, a former Apple manufacturing engineer. “Millions of people are employed by the Apple supply chain in China.” The Scale Problem Apple’s Chinese manufacturing facilities are enormous. The Zhengzhou complex, dubbed “iPhone City,” employs hundreds of thousands and operates like a self-contained town—with dormitories, schools, gyms, and hospitals. Replicating such a setup in the US would be unprecedented. Meanwhile, Apple’s partners are building the world’s second-largest iPhone facility in India. The country is rapidly becoming a key production hub, now producing an estimated 35 million iPhones a year, enough to meet a large share of US demand. Skills Gap and Supply Chain Challenges Apple CEO Tim Cook has long argued that China’s advantage lies not in low labour costs, but in its concentration of skilled engineers and tooling experts. As early as 2017, Cook pointed out that the US lacked the number of tooling engineers needed even to fill a room, while China could fill football fields. Moreover, Apple’s complex supply chain relies on thousands of components and partners primarily based in Asia. Even the Mac Pro, assembled in Texas, relies on parts manufactured in China. Automation Isn’t the Answer – Yet While some suggest that Apple could sidestep labour shortages by building a fully automated, robotic plant in the US, industry experts say automation can’t yet match the adaptability or precision of human workers—especially when product designs and materials are constantly evolving. “You design the thing, rebuild the factory, and then you only have six months to sell it,” said a source familiar with Apple’s supply chain. “The pace of change makes it so much harder to automate.” Diversification, Not Repatriation Apple has been steadily reducing its reliance on China, shifting some production to countries like Vietnam, Malaysia, and Thailand—for devices like AirPods, Macs, and iPads. But for the iPhone, which sells over 220 million units annually and comes in multiple configurations, China’s scale remains unmatched. Even in India, Apple’s largest alternative production site, it has taken a decade to reach meaningful output levels. For now, while Indian-made iPhones are increasingly shipped to US shelves to circumvent tariffs, the dream of a fully American-made iPhone remains just that—a dream.–BLOOMBERG

TOKYO: Japan’s Nikkei 225 surged 7.9% to close at 34,226.17 on Thursday, buoyed by investor relief following US President Donald Trump’s surprise announcement of a 90-day suspension on newly imposed tariffs. The broader Topix index also climbed 7.2% to 2,518.26, as nearly all sectors rebounded sharply. The rally marks a dramatic turnaround after a week of heightened market volatility. On Monday, the Nikkei plunged 7.8% to a one-and-a-half-year low, before rebounding 6% on Tuesday, then falling another 4% on Wednesday. Thursday’s recovery was fueled by a strong overnight performance on Wall Street, where the S&P 500 posted a 9.5% gain — its biggest single-day increase since 2008. Market analysts attributed the rebound to investor optimism that the tariff pause could soften geopolitical tensions and reduce headwinds for global trade. “Investors were quick to buy back into the market, likely regretting the heavy selling earlier in the week,” said Seiichi Suzuki, Chief Equity Market Analyst at Tokai Tokyo Intelligence Laboratory. “The sharp rebound also shows the market had overreacted to the initial tariff announcement.” Fast Retailing, the parent company of Uniqlo, rose 7.2%, providing a strong lift to the benchmark index. Chip-related stocks also posted outsized gains, with Tokyo Electron jumping 11.77% and Advantest surging 13.66%, buoyed by renewed investor confidence in the tech sector. All 33 industry sub-indexes on the Tokyo Stock Exchange gained, with the nonferrous metals sector leading the rally with a 12.65% increase. The banking sector, which had been heavily sold off amid recession concerns, bounced back with a 9.2% gain. Morgan Stanley analysts said the tariff suspension is particularly bullish for Asian markets, with Japan standing out due to its strong reflationary fundamentals. “Japan had come closest to pricing in a recession among major Asian markets,” the investment bank noted in a research update. “This policy reversal unlocks significant upside potential.” Of the 225 constituents on the Nikkei, all but one registered gains. On the Tokyo Stock Exchange’s Prime Market, 99% of stocks advanced, underscoring broad-based investor confidence and renewed momentum in Japanese equities.

KUALA LUMPUR: China, Japan and South Korea, which have signalled alliances since the announcement of sweeping US tariffs, held their second trilateral meeting in just eight days after their first engagement this year, reflecting the urgency as Washington’s move has caused ripple effects globally. The meeting between the three economic powerhouses on March 30 came under the spotlight after the US President announced a baseline tariff of 10 per cent on all countries, with higher duties for some, including China, which now faces a 34 per cent tariff on imports, and Japan, hit with a 24 per cent duty. As for South Korea, it is bidding to lower the 25 per cent tariff rate. It is understood the meeting raised concerns over global and their respective economic outlooks, as tariff policies such as this hurt trade, business and consumer confidence, and ultimately strain diplomatic ties. Global markets took a route on Monday, reportedly wiping out more than US$10 Trillion from major markets. The Malaysian bourse reportedly lost RM93.15 Billion in market capitalisation. The trilateral meeting, held on the sidelines of the 12th ASEAN Finance Ministers’ and Central Bank Governors’ Meeting (AFMGM), saw the attendance of China Vice Minister of Finance, Liao Min; Japan’s Vice Minister of Finance, Atsushi Mimura; and South Korea’s Deputy Minister for International Affairs, Ministry of Economy and Finance, Choi Jiyoung. The three leaders are also likely to attend two  sessions of the ASEAN +3 Finance and Central Bank Deputies Meeting (AFCDM+3) today. This latest US move is expected to raise the total duties on Chinese goods to %$ per cent this year, while for South Korea, the Trump administration’s global reciprocal tariffs chart shows a 25 per cent rate. In response, China has fired back with retaliatory tariffs of 34 per cent on all US imports, effective April 10, according to international media reports. The +3 economies had previously convened in late March and hinted at a joint response to the escalating tariff tensions. The meeting marked the first economic dialogue in five years among the three Asian export powerhouses, who are seeking to bolster regional trade amid mounting US protectionism. At the March 30 meeting in Seoul, China, Japan and South Korea reaffirmed their commitment to trilateral economic and trade cooperation to tackle “emerging challenges”— a partnership now seen as increasingly vital in light of the US measures that have sparked fears of a global trade war. The three nations also agreed to accelerate negotiations on a trilateral free trade agreement, though concrete progress remains elusive. — BERNAMA