Key Apple supplier says ’empty shelves’ likely within two months

Key Apple supplier Pegatron has suggested that the US might soon see “empty shelves” in stores due to the impact of Trump’s tariffs.

Pegatron is second only to Foxconn in its role in Apple’s supply chain, as a key assembler for MacBooks, iPads, and the Apple Watch …

Trump’s tariffs

In the space of two months, the Trump administration announced tariffs on products manufactured in China that started at 10% and ramped up to 145%.

An exemption for consumer electronics products was later announced, as we predicted, but the administration subsequently said that this would be purely temporary. With most Apple products made in China, that would potentially result in massive increases to US pricing.

While I’ve expressed my own view that subsequent maneuvering will likely see Apple continue to be exempted, Pegatron says the damage may already be done.

Empty shelves likely within two months

Pegatron told Reuters that it believes current uncertainties around the future of the tariffs is making things too chaotic for businesses like Apple to make contingency plans.

In theory, it would make sense for companies to accelerate imports in order to stockpile products before the higher tariffs kick in. Apple already did this ahead of the initial 10% deadline, for example.

But Pegatron says that US companies are unlikely to do the same thing during the current pause as the supply-chain chaos it would create doesn’t make sense when policies can change overnight. The result, suggests the company, is that companies like Apple are now in wait-and-see mode – and that could create severe shortages.

Pegatron chairman T.H. Tung told Reuters: “Within two months, shelves in the United States … might resemble those in third-world countries, where people visit department stores and markets only to find empty shelves, all because everyone is waiting and seeing” […]

Tung said U.S. importers will not necessarily take advantage of the pause by ramping up shipments if they believe the 10% tariff might be repealed.

The company says it isn’t changing any of its production plans in response to the tariffs.

“We won’t immediately adjust our long-term plans just because of two or three months of tariff changes. Manufacturing bases require long-term planning,” he added

The substantial damage done to the US economy has put the White House under growing pressure to reverse course, so there’s hope that the “pause” will quietly be made permanent.

Photo by Brian Wangenheim on Unsplash