Apple asks suppliers in Taiwan to label products as 'Made in China' amid tensions: Report

American multinational technology company, Apple Inc has asked suppliers to ensure that shipments from Taiwan to China comply with Chinese customs regulations amid fears of facing trade barriers resulting from US House Speaker Nancy Pelosi’s visit to Taipei.

According to Nikkei, Apple told the suppliers on Friday that China is fiercely enforcing the long-standing rule that parts and components made in Taiwan should be labelled as being made either in "Taiwan, China" or "Chinese Taipei” indicating that the island belongs to Beijing.

Overriding China’s warnings, Pelosi arrived in Taipei irking Beijing enough to introduce trade sanctions on the island and pull out of crucial talks with Washington. China also announced large-scale military drills encircling Taiwan, which received criticism from the US. The tensions over the long-standing Taiwan issue were reignited with the visit of the US House Speaker to the self-ruled democratic island.

Amid heightened tensions in the region, the US tech giant called on the suppliers to treat the matter with urgency and avoid any kind of disruptions caused by goods and components held for scrutiny, sources revealed to Nikkei. As per the report, the timing is sensitive for Apple especially because the company’s suppliers are preparing components which are needed for the next iPhones and other new products that are scheduled for launch this autumn.

'Made in Taiwan' labelled cartons could be held by Chinese customs department

People familiar with the matter told the media outlet that using the phrase “Made in Taiwan” on any import declaration forms, documents or even cartons could lead to shipments to be held and checked by China’s customs department. Moreover, the penalties for violating such rules can lead to a fine of up to 4,000 yuan ($592) or in some cases, the rejection of the shipments. 

This has further escalated worries for suppliers who need to ship materials, components or even parts from Taiwan to China. Nikkei noted, “as the democratically governed island also requests that all exports be labelled with a product of origin, which means they must carry the words "Taiwan" or "Republic of China," the island's official name”.

Apple’s Friday warning came after shipments from Taiwan to one of iPhone assembler Pegatron's facilities in China on Thursday were held for review of the declaration form and cartons for labels.

It is pertinent to mention that the scrutiny of shipments to Pegatron's Suzhou facility was dramatically increased after a senior Pegatron executive and other Taiwanese chip industry leaders met with Pelosi in Taipei at a lunch hosted by President Tsai Ing-wen. Even though it has never ruled the island, China considers Taiwan as its own territory. Nations developing ties with Taipei are also met with staunch criticism from Beijing as a violation of its ‘One China’ policy. 

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