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Facing potential tariff hikes, Apple is reportedly considering expanding iPhone assembly in Brazil, according to sources cited by Brazilian magazine Exame.
Lowering Import Duties: Brazil as a Strategic Hub
The move aims to mitigate the impact of rising US tariffs on imported goods. By increasing production capacity at its Brazilian facilities, Apple hopes to benefit from lower import duties and streamline its supply chain.
Apple has maintained a presence in Brazil since 2011, operating a manufacturing plant in São Paulo in collaboration with Foxconn. Currently, the facility primarily assembles entry-level iPhone models to cater to the local market. The envisioned expansion would enable the assembly of a wider range of iPhone models.
iPhone 16 Production in Brazil
Recent certifications from Anatel, Brazil’s telecom regulator, have paved the way for Apple and Foxconn Brazil to assemble the iPhone 16 in the country. This builds upon existing assembly operations for the iPhone 13, iPhone 14, and iPhone 15. The report also hints at the possibility of Apple manufacturing iPhone 16 Pro models in Brazil for the first time.
Export Potential: iPhones “Made in Brazil” for the US Market?
If successful, iPhones assembled in Brazil could potentially be exported to the US market, significantly reducing Apple’s tax burden compared to importing from China or India. Currently, the US government imposes higher tariffs on products imported from China (34%) and India (26%) compared to Brazil (10%).
The announcement of potential tariffs has already impacted Apple’s financial performance, with shares reportedly declining and market value decreasing. Other US companies, such as Nvidia, have experienced similar effects.