Apple (AAPL) -) shares moved lower in pre-market trading Monday following reports that its key supply-chain partner, Taiwan-based Foxconn, is facing what could be a politically motivated probe into its tax affairs by officials in China.
China-based subsidiaries of Foxconn, the world's biggest assembler of Apple iPhones, is now the subject of tax audits from local authorities in Henan, Hubei, Guangdong and Jiangsu provinces, the state-controlled Global Times reported Sunday, while adding its land use is also being probed by China department of natural resources.
The moves follow a series of trade and export restrictions on high-tech semiconductors and AI-related technologies put in place by President Joe Biden over the past year and could draw Apple, the world's biggest tech company, into the ever-growing dispute between Washington and Beijing.
Earlier this fall, China reportedly banned the use of iPhones by government employees and state-backed enterprises, which came just days after the launch of China-based tech group Huawei's new handset, the Mate 60, which could pressure Apple's sales in one of its most important markets.
Apple said in early August iPhone revenues fell 2.5% from last year to $39.67 billion over the three months ending in June, while China sales rose 1.1% from last year's Covid-hit period in the world's second largest economy to $15.76 billion.
Apple shares were marked 1.3% lower in early Monday trading to change hands at $171.01 each, a move that would trim the stock's six-month gain to just 3.5%.
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