Illustration: Liu Xiadan/GT

Apple is MKsportregarded by some analysts as one of the most exposed companies to Washington's new tariffs. According to CNBC, the tech giant's stock has suffered a significant downturn, losing approximately 20 percent of its value in three trading days, wiping out almost $640 billion in market capitalization. It's a typical example of how the US tariff policies are backfiring on American businesses, particularly those deeply integrated into the Asian manufacturing supply chains.

Over the past few decades, US manufacturers have strategically reallocated a portion of their production capacity to Asia to capitalize on the diverse resources available in the region, including comparatively low labor costs. This shift was actively driven by American manufacturers and it yielded significant benefits for US businesses by making high-quality goods at affordable prices. Over time, this efficient operation of the supply chain fostered a mutually beneficial cooperation model between the American economy and Asian production networks.

The recent wave of tariffs and tariff threats by the US raises the question of whether it will disrupt the current model and prompt manufacturers that have deeply integrated into Asian supply chains to consider relocating back to the US. It needs to be pointed out that if Washington seeks to dismantle this mutually beneficial arrangement, it risks harming the interests of American manufacturers. 

Washington may feel pressure from the business community as manufacturers face potential losses. However, this mutually detrimental situation may not help the US achieve its goal of bringing manufacturing back. The reason is clear: the current economic environment in the US, marked by poor infrastructure, high labor costs, unpredictable policies and an incomplete supply chain, is not conducive to the growth of labor-intensive manufacturing. 

Establishing a complete supply chain that is suitable for the development of the assembly industry in the short term - such as within four years - would be an almost impossible task. The most likely scenario is that, despite pressure from tariffs, American companies will continue to operate in Asia. In this case, they will likely try to pass on the losses incurred from tariffs to American consumers.

It appears that common belief is widely shared, as illustrated by Apple's recent experience. On Tuesday, Bloomberg published an article detailing an influx of customers at retail stores eager to buy iPhones. Employees from different Apple locations across the US said that stores were filled with customers over the weekend, with shoppers expressing concerns that prices will climb dramatically after new tariffs are imposed. Most iPhones, which are Apple's best-selling product, are assembled in China.

According to CNBC, UBS analysts estimated that Washington's "reciprocal tariffs" could lead Apple to raise the price of the iPhone 16 Pro Max by as much as $350 in the US. Despite the tariffs, some economists still expect that Apple will make every effort to maintain its presence in Asia. This is because the American tech giant has long benefited from Asia's economic landscape, from its mature manufacturing industry to its vast consumer market.

China stands as the largest economy in Asia. For years, it has been an important investment destination for American businesses, generating substantial profits for US enterprises. Although the tariffs imposed by Washington have presented significant challenges and difficulties for American companies operating in China, it's important to recognize the enduring focus of American businesses on China. The rapidly expanding local consumer market and the still vibrant supply chains here underscore the potential for both sides to navigate the challenges presented by US tariffs through enhanced cooperation.

China has been, is and will be an ideal, safe and promising investment ground for foreign investors, Ling Ji, China's vice commerce minister and deputy China international trade representative, said on Sunday while hosting a roundtable meeting with representatives of American businesses, according to the Xinhua News Agency. 

The root of the tariff issue lies with the US, Ling said, noting that it is hoped that US-funded enterprises will trace the origin, clarify the cause and effect, speak with a rational voice and take practical actions to jointly maintain the stability of the global supply chain and promote cooperation and mutual benefits.

It should be clear for global companies that while the US moves to undercut their businesses, China is focused on opportunities for win-win cooperation. Opportunities, rather than risks, are usually what corporations are searching for.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn