Apple key supplier Foxconn is planning to shift its iPhone factory in Vietnam

Foxconn, the world’s biggest electronics contract manufacturer and a key Apple supplier, is considering setting up a factory in Vietnam to mitigate any impact of an ongoing trade war between the United States and China, Vietnamese state media reported.

The move would be one of the first significant steps by a major company with large manufacturing facilities in China to secure an additional production base outside the country because of trade tensions between the world’s top two economies.

The report also comes as several executives of other corporations interviewed by Reuters singled out Vietnam and Thailand as preferred destinations should they need to shelter operations from the trade war.

“Foxconn Group and the Hanoi People’s Committee are working together to open an iPhone manufacturing facility in Vietnam to negate the impacts of the US-China trade war,” the Vietnam Investment Review reported on Monday.

The newspaper cited Vu Tien Loc, head of the Vietnam Chamber of Commerce and Industry, as raising the matter with Prime Minister Nguyen Xuan Phuc at a meeting on November 22.

“We are discussing the possibility of this with Foxconn,” Loc told Reuters, without elaborating. Hanoi People’s Committee Chairman Nguyen Duc Chung declined to comment.

Taiwan’s Foxconn, formally Hon Hai Precision Industry Co, said it would not comment on current or potential customers or any of their products.

The iPhone assembler said earlier this year that the Sino-US trade spat was the biggest challenge it is facing, and its high-level managers were making plans to counter the impact.

In trade talks on Saturday, US President Donald Trump and Chinese President Xi Jinping agreed not to introduce any tariffs for 90 days as negotiations continue.