[proust]

So is this Trump helping bail out ZTE in exchange for China stepping back from Iran and NK?

[Zhang Fei]

“So is this Trump helping bail out ZTE in exchange for China stepping back from Iran and NK?”

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It’s also possible that this is overkill on the part of regulators. ZTE buys $2b a year worth of parts from American vendors. This ruling will lead some non-American equipment manufacturers to source from non-American vendors, where possible. It’s a risky ploy.

What if China decided that any supplier with operations in China must stop supplying Apple? They could literally shut down Apple. Note that the impact on China’s economy wouldn’t be particularly significant, because these are all low level assembly jobs, and most of Apple’s suppliers are non-Chinese companies where most of the value-added (the design jobs) isn’t tacked on in China. But Apple would be up the creek, because all of its tooling (technically FoxConn’s) would be marooned in China with no hope of being moved out, because of Chinese regulations.

[Zhang Fei]

“So is this Trump helping bail out ZTE in exchange for China stepping back from Iran and NK?”

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Bottom line here is that with a lot of high-value ZTE jobs at stake, it wouldn’t surprise me if the Chinese threatened to lower the boom on Apple. At minimum, they could erase Apple’s Chinese sales, which amount to $50b. Given that almost all assembly is done in China, they could literally shut Apple down for several quarters. My guess is that between being shut out of China and the cessation of Chinese production, Apple could suffer a decline of $100b (~40%) in sales vs last year’s numbers. And the purchase of tooling on an emergency basis from non-Chinese sources, as well as the establishment of a new production base in a low cost labor country would probably cost tens of billions of dollars. In other words, Apple could see its earnings drop from $50b in 2017 to zero this year. That’s a lot of simoleons.

[trebb]

Those who have been paying attention have a better sense of Trump....and don’t keep finding MSM-type ways to twist crap and sound all concern-troll-like.