As Tariffs Bite Apple, Samsung's Global Manufacturing Network Gains Edge In US-China Trade War

As trade tensions between the U.S. and China escalate, Samsung Electronics SSNLF may hold a critical advantage over rival Apple Inc. AAPL through its diversified global manufacturing network.

What Happened: While smartphones are currently exempt from President Donald Trump‘s reciprocal tariffs, which reached 145% on Chinese imports this month, analysts warn that additional semiconductor-specific tariffs are forthcoming, CNN reported. This disparity in manufacturing footprints could prove consequential.

Apple remains heavily dependent on China, with Wedbush Securities estimating 90% of iPhone production still occurs there despite some shifts to India. By contrast, Samsung closed its last phone factory in China in 2019, with approximately 90% of its smartphone production now based in Vietnam, according to Counterpoint Research.

“The advantage is, yes, that they’re not facing the whatever crazy number we are currently dealing with,” said Gerrit Schneemann, senior analyst for Counterpoint Research.

However, analysts remain skeptical this will translate to immediate market gains for Samsung. Tight brand loyalty among Apple users and different market positioning — Samsung dominates lower-priced segments while Apple controls premium markets — could limit customer migration.

Why It Matters: Additionally, Vietnam and India still face 10% tariffs under Trump’s plan, meaning Samsung isn’t completely insulated from trade pressures.

The broader economic impact of tariffs also threatens consumer spending on electronics. “Daily necessities and essentials are going to be higher on the list then maybe a new or upgraded smartphone,” Schneemann noted.

Apple’s potential response includes accelerating its manufacturing shift to India, though analyst Craig Moffett of MoffettNathanson questions this strategy’s effectiveness since many components would still originate from China.

UBS analysts previously estimated an iPhone assembled in China could see price increases of up to $800 before smartphone exemptions were announced.

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