The Communist Chinese government got a pack of panties last week when Speaker of the House Nancy Pelosi (D-Ca) visited Taiwan. China saw this as a violation of the ‘One China’ policy that the US has followed for fifty years. That policy states that the US government “recognizes that all Chinese on both sides of the Taiwan Strait maintain that there is only one China and that Taiwan is part of China” and that the US “does not dispute that position”.
The People’s Republic of China believes the US has violated its “One China” policy
While the US has a formal relationship with the People’s Republic of China (PRC), it does have an “unofficial” relationship with Taiwan that the PRC felt was made official with Pelosi’s visit. As a result, the country harnessed some military muscle by flying 68 fighter jets off the coast of Taiwan, sending warships to the Taiwan Strait, and sending drones to Japan while Pelosi was in Taiwan. The People’s Republic of China also decided to cut off talks with the US on various topics.
Some deliveries sent to manufacturer Pegatron are blocked by Chinese customs
Taiwan is where many major US tech companies, such as Apple, source supplies such as chips. Taiwan Semiconductor Manufacturing Corp. (TSMC) is the largest independent foundry in the world and considers Apple its largest customer. Today, Apple told its Taiwan-based suppliers, including TSMC, that when shipping parts and components to China, they must comply with China’s new regulations, which include labeling supplies as “Taiwan, China” or “Chinese Taipei”.
The reason for Apple’s warning to its Taiwan-based suppliers is due to China’s decision to allow supplies sent by suppliers in Taiwan to Pegatron’s plant in Suzhou, China, which makes a number of products for US companies such as Microsoft. and Taiwan, to stop. These shipments are stopped by customs in the PRC and all documentation and shipping containers are checked with a fine-tooth comb to ensure they do not mention Taiwan or its official name “Republic of China”.
With the unveiling of the 2022 iPhone models in just a few weeks, it’s the last thing Apple needs
But yeah, here’s the trick. On the other hand, Taiwan requires that all export products have a label with the origin of the shipment, which means they must be stamped with “Taiwan” or “Republic of China”. That is of course exactly what the Chinese customs do not want to see. In an effort to avoid supply chain disruptions, Apple has warned its Taiwan-based suppliers to develop contingency plans of sorts.
Apple has also asked its supply chain to review and edit if necessary labels on boxes and forms for shipments from Taiwan to China, according to those familiar with the situation. Chip shortages and supply chain issues are a huge headache for Apple right now, and with the uneasy timing, Apple must remain diplomatic.