Apple asks suppliers to avoid ‘Made in Taiwan’ labels amid tensions over Taiwan, but iPhone 14 will be released on schedule

The visit of the Speaker of the US House of Representatives, Nancy Pelosi, to Taiwan caused a stormy reaction from the People’s Republic of China. Fortunately, escalation didn’t go further than military exercises, but China is increasing its economic pressure on the island.

In particular, as reports Nikkei, Apple has warned suppliers that China has begun to strictly enforce its long-standing rule that parts and components made in Taiwan must be labeled as made in “Taiwan, China” or “Chinese Taipei”.

Although the US officially supports democratic Taiwan, Apple is urging suppliers to address the issue urgently to avoid possible disruptions caused by goods and components being inspected.

Timing is critical for Apple as its suppliers prepare components that will be used in the iPhone 14 and other new products planned for release this fall.

The use of the phrase “Made in Taiwan” on any import declaration forms, documents or boxes may result in the goods being detained and inspected by Chinese customs. Violation of such a rule is punishable by a fine of up to 4,000 yuan ($592) or, in the worst case, the shipment will be rejected, one of the Nikkei sources said.

This poses a dilemma for suppliers who must ship materials, components or parts from Taiwan to China, however, as the democratically-ruled island also requires all export goods to be marked with the product of origin, meaning they must contain the words “Taiwan” or “Chinese Republic”, the official name of the island.

Apple’s warning comes after shipments from Taiwan to one of Pegatron’s factories in China, which assembles iPhones, were held up on Thursday for checks to determine whether the import declaration form or boxes were labeled “Taiwan” or “Republic of China”.

However, Pegatron denied this information, noting that the company’s factories are operating as usual, and supplies are non-stop.

“In response to today’s media reporting that factories in China were forced to suspend production and shipments, Pegatron would like to clarify that our operations in China currently are running as usual, there’s no suspension on productions and shipments,” says the statement of Pegatron.

It seems that the reaction of the PRC to the visit of the speaker of the US House of Representatives to Taiwan will not affect the release schedule of the iPhone 14 and other Apple products. As noted in weekly Power On newsletter for Bloomberg Mark Gurman, the company has already started recording videos for its presentation in September, which traditionally takes place in the first half of the month.

Gurman notes that Apple’s plans have not changed, and the company should expect:

  • iPhone 14 and iPhone 14 Pro will get an always-on screen, a smaller notch in the screen on Pro models and better cameras;
  • Apple Watch Series 8 will get a body temperature sensor, but like the new Apple Watch SE, will look similar to the previous generation;
  • And the biggest update to the line will be the Apple Watch Pro with a titanium case, a larger screen and a larger battery.
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