AAPL Apple Inc

By Tripp Mickle and Sarah E. Needleman 

Apple Inc. said it is keeping production of its new Mac Pro computer in Texas, reversing earlier plans to shift manufacturing of the device to China.

The decision follows the Trump administration's granting Apple exemptions last week from tariffs on 10 items it imported from China. The exclusions for components, including a power supply and a logic board, cover a period from September of last year to August 2020, and the U.S. will refund tariffs already paid.

The tech giant had earlier tapped Taiwanese contractor Quanta Computer Inc. to manufacture the nearly $6,000 desktop computer outside Shanghai. The previous version of the high-end computer, which was introduced in 2013, had been assembled in Austin, Texas, by contractor Flex Ltd. and was touted as Apple's only Made in USA product.

Escalating trade tensions over the summer challenged Apple's plans to make the product in China, where labor and logistics costs are lower than in the U.S. In August, President Trump said he planned to extend tariffs of 10% to essentially all Chinese imports in December and raise tariffs on items already subject to duties. The tariffs could have cut into Apple's profits or forced it to increase the cost of its $5,999 Mac Pro made in China.

Apple's decision to reverse course and instead keep the device's production in Texas is among the most pronounced examples of how tariffs have roiled operations. Former operations employees and current suppliers say they have spent much of the past year evaluating contingency plans for products that are assembled in China, as the company looks to avoid tariffs.

Write to Tripp Mickle at Tripp.Mickle@wsj.com and Sarah E. Needleman at sarah.needleman@wsj.com

(END) Dow Jones Newswires

September 23, 2019 13:08 ET (17:08 GMT)

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