That is the setting I am faced with. You see, like McCarthy had his Russian phobia, Trump is now delivering the Chinese phobia, also known as the yellow fear. We can argue how right McCarthy was in light of the events from the last few years (and a decade before that), But as the yellow fear is grasping America, the question becomes, is it a valid one? I am not denying that there are issues, the larger setting is now on big tech. You see Apple known for its multi trillion dollar value is now under the hammer. The article (at https://www.bbc.com/news/articles/c86jx18y9e2o) gives us ‘Apple says most US-bound iPhones no longer made in China’ the issue is not that they aren’t made in China. The stage becomes where are they made now? At present Apple is giving us that “It comes as the technology giant estimated that US import taxes could add about $900m (£677.5m) to its costs in the current quarter, despite Trump’s decision to spare key electronics from the new tariffs.” Yet as I see it, the focus is in the wrong area. It is not where it is build now, the question becomes “At what loss?” And it is not money I am speaking of. These plants are Chinese in nature (as far as I can tell), and now we get a very new stage. No matter where they are set. China might not like it that certain IP manufacturing settings will leave China, which would be an acceptable move. Not for Apple and the losses they will receive because of it, and there the tariff war takes another bite out of the meat that is American Revenue. I am not stating that this will be great, but even at a mere 2% loss of quality it will impact numbers and it will hit Apple’s customer satisfaction. A simple setting that will impact the Apple revenue bottom line and it will be more than dollars. This could (could being the operative word) impact customer care numbers too. A whole new area for Apple to maneuver against the economic currents it is fishing in.
As Timmy the Cook gives us “He also said Apple is shifting its supply chain for US-bound products away from China, but it is India and Vietnam that are poised to be major beneficiaries of that move.” It is the setting that I fear, as China is pushed out, whomever gets the new ‘victory’ is likely to be no more than 95% of what China delivered and that impacts, so even if there is merely 1% impact (I fear it is larger) it impacts numbers of produced iPhones, as well as the QC of the product. So not only will Apple see less results, if this holds up the loss of quality (with an impact of more service patches) will upset its customers to no end and the speculative result is that this more merely impacts the need for a Huawei phone (I would be OK with the jump from Apple to Google), which will feel good for Google, but Apple will not be pleased.
So as we consider “China will remain the country of origin for the vast majority of total products sold outside the US, he added.” With the setting that Made for America will not have the rosy stage that President Trump is hoping for. I might think that Apple will not like it either. And with “However moving production lines to India will take time and significant investment, costing billions of dollars”, with the added “Apple have said they want to invest $500B over the next few years.” And that still comes with my speculated expected loss of quality, a setting that Apple never wanted, or never opted for.
So what is the real threat? Is it China or has it become President Trump?
Even as the Financial review gives us ‘Apple and Amazon have no idea what’s coming’, I myself don’t agree. They are very much aware that they know. The American Administration howling like little puppies that Amazon was making moves to give their customers a look at what the tariff was doing to their goods with ‘Donald Trump slams Amazon’s rejected plan to display cost of tariffs on goods’ (source: ABC News) I wonder when people will figure out to ask questions from an administration bend on hiding additional charges (to customers) and consider that the quote “US President Donald Trump has labelled a reported plan by online retailer Amazon to display the cost of US tariffs on its products as a “hostile and political act”.” Is clear evidence that this America Administration is all about a lack of transparency. It is the statement from Shanti Kelemen, chief investment officer at M&G Wealth where I have issues. I do not deny that her statement is true, but lacking “There will still be tariffs that impact the supply chains [for Apple] and a cost to move them and build new factories” It took years to get the Chinese factories to work at the level they are now working at. The other factories will have to go through all these pains to get them running and that is before you consider that there would also be staffing issues. China and India have different settings in mental achievements. So the pain for Apple is merely beginning.
A setting that the bulk of people are overlooking, I wonder why.
So as Amazon scrapped the tariff mention on its pricing, the call was heard by a lot of people and they are now looking at Temu and Alibaba. Alibaba mentioned a net income up by 237.53%. Today the Alibaba group is up by 3.83%. I cannot say how much of an impact the tariff has had there, but as others are merely scraping by and some are even reporting losses, the view on Alibaba might not be seen as a good thing, yet Wall Street seems optimistic about Alibaba (not that I know anything about that).
So this is where the gem requires seeking. Is it still Apple? And there is a second setting. Will there be a larger call to reject the Apple for American markets? This is not easily answered because it is all depending on what is yet to happen. But Americans might be required to smuggle their new Apple devices into America. All because of a setting that the American administration itself is hunkering down on the lack of transparency. The one weird thing I am noticing is that the tariff solution is setting the minds of others towards what is the right path and at present it is not an American First item. And there is more bad news on the horizon (for America) as we seek gems we should be aware that Huawei is a much larger gem than expected. You see, Huawei is making larger captures revenue that expected. The headline ‘Indonesia is hooked on Huawei’ (Source: ASPI) is important as Indonesia is 3% of the planet. This might not seem much, but it gives Huawei larger importance to get into Bangladesh which gives them another 2%, so in a few short weeks Huawei gets an improved 5% goalpost. They already had visibility all over the Arabian peninsula and as Egypt is becoming a larger slice of their business, we see that America basically lost out of a 7% market share. As I see it America First is having a few corners they slice off from themselves. As these stages are evolving and the setting for Europe changes, as America is fumbling the ball. They are now ready to ignore American ‘advice’ and reopen doors with Huawei (likely with conditions) and as I see it Huawei is likely to respond favorable to that. As I see it, the game is changing andAmerica is losing several base stations in delivered ‘revenue’, a state that was almost unimaginable less than a year ago. That was shown a mere two months ago with ‘German telcos pool efforts to retain more ‘open’ Huawei – sources’ and as this is realised, the rest of Europe is likely to follow, at least the EU is.
The gem were not the tech companies, they are found where these companies were not, mainly through the pains given to these companies. Apple was not the focus, the companies that profited by the pain given to Apple. The moment you see that, is the moment that you realise that this chaotic setting is giving Chinese companies the open doors they were waiting for. I have no idea what Russia is up to, but this reminds me of the Toshiba settings. I wonder if this is what was supposed to happen, but no matter what. It seems that Huawei is profiting because of this. And with HarmonyOS now at version 5, Apple and others don’t only have to deal wit Android, they now have a competitor in HarmonyOS devices. This is a time to remember the words of Richard Yu who stated that all Huawei devices the company will launch in 2025 will be powered by HarmonyOS Next. You might have forgotten that, but I did not. So as Apple and Google were given settings of diversification, Huawei combined all the strengths they had and that will also impact market share.
So as some will be given and accepted that the gem is America First. Others might not agree with that and as some sources are diverted Chinese corporations are now focussed on Asia, Arabian countries and Europe (through TAWAL). A setting I warned for almost two years ago and now it is seemingly happening. So where were these captains of industry?
Have a great day and enjoy the smell of coffee in the morning.
Lawrence van Rijn - Law Lord to be 