Speaker of the House Nancy Pelosi (D-Ca) visited Taiwan last week, upsetting the Chinese government. This violated the U.S.’s 50-year-old “One China” policy, according to China.
The U.S. “acknowledges that all Chinese on either side of the Taiwan Strait maintain there is only one China and Taiwan is part of China” and “does not challenge that position.”
China believes the U.S. violated its “One China” policy.
While the U.S. has a formal relationship with the PRC, it has a “unofficial” relationship with Taiwan that the PRC felt was made official by Pelosi’s visit. While Pelosi was in Taiwan, the country sent 68 warplanes, warships, and drones to Japan to show its military might. The PRC also ended talks with the U.S.
Apple sources chips from Taiwan. Apple is Taiwan Semiconductor Manufacturing Corp.’s (TSMC) top customer. Apple told its Taiwan-based suppliers, including TSMC, that when shipping to China, they must label supplies as made in “Taiwan, China” or “Chinese Taipai.”
If the PRC’s demands sound like a child’s, you’re right. The PRC is bullying Taiwan’s suppliers to show who owns the island.
China’s decision to hold up supplies sent from Taiwan to the Pegatron factory in Suzhou builds some products for U.S. firms like Microsoft and Taiwan. Customs in the PRC are holding up these shipments to make sure they don’t mention Taiwan or its official “Republic of China” moniker.
Pelosi was photographed with Pegatron Vice Chairman Jason Chen and other Taiwan chip executives, angering the PRC. Apple told its supply chain today that this is an urgent matter, especially as the iPhone 14 series is assembled. The non-Pro iPhone 14 and 14 Max are reportedly having display and camera lens issues.
Apple doesn’t need this with the 2022 iPhones coming soon.
Apple doesn’t need iPhone 14 assembly line supplies returned to Taiwan by customs. “Made in Taiwan” on Chinese import forms or shipping cartons could delay or reject shipments. A 4,000 (US$592) fine is also possible.
The catch? Taiwan requires all exports to be labeled “Taiwan” or “Republic of China” Chinese customs won’t allow that. Apple has warned Taiwan-based suppliers to prepare for supply chain disruptions.
Apple asked its supply chain to edit carton and form labels for shipments from Taiwan to China, if needed. Apple is dealing with chip shortages and supply chain issues, and the timing is awkward.