Luxshare Precision Industry and other mainland Chinese companies that supply Apple tumbled in Monday trading, after US President Donald Trump urged the Cupertino, California-based maker of iPhones and iPads to make more of its products at home amid threats to put more tariffs on Chinese products.
Luxshare Precision, a maker of connectors that relies on the US company for 37 per cent of its sales, slumped by the 10 per cent daily limit to 16.09 yuan in Shenzhen, its lowest close since June 27. Other suppliers such as O-film Tech and Suzhou Anjie Technology were also heading south, with declines of at least 8 per cent. The benchmark Shanghai Composite Index slipped by 1.2 per cent in Monday afternoon trading.
In response to a letter by Apple last week to the Office of the US Trade Representative, in which the company said tariffs proposed on Chinese goods worth another US$200 billion would raise the prices of its products, Trump tweeted that there was an easy way out – making its products at home rather than in China.
The US president also urged carmaker Ford Motors to boost its manufacturing in the US.
Trump has escalated tensions with Beijing by saying he was willing to impose tariffs on an additional US$267 billion worth of Chinese goods. This is beyond the duties on US$200 billion worth of goods the White House is still considering after a public comment period ended last week. The Trump Administration has already implemented tariffs on Chinese goods worth US$50 billion.
If all tariffs go into effect, they will exceed all US imports from China last year, which stood at US$505 billion.
O-film Tech, a manufacturer of touch screens, plunged by 10 per cent to 14.31 yuan and Suzhou Anjie, a maker of functional devices, shed 8.3 per cent to 13.41 yuan. O-film Tech derived 37 per cent of its annual sales from Apple in 2017, while Suzhou Anjie counts on the US company for 16 per cent of it revenue, according to Bloomberg data.
Shenzhen Desay Battery Technology, which supplies batteries to Apple, slid by 4.9 per cent to 24.87 yuan.
Apple had earlier said its core products from Apple Watch to desktop computers and accessories including chargers and adaptors would be affected, if the US follows through with new tariffs on goods worth US$200 billion.
This article Apple’s Chinese suppliers slump after Trump says tech giant should make more of its products in US first appeared on South China Morning Post