Trump’s rationale for his threatened tariffs is to force companies to manufacture in the US. He’s cited the example of Apple making iPhones in the US, and even recently claimed that the company plans to do so.
Apple has explained many times why it simply wouldn’t be practical to do this, with CEO Tim Cook doing so a full decade ago. Analysts, supply-chain experts, and a former Apple engineer have all added their weight to the view that it simply isn’t possible, and wouldn’t help even if it were …
Tim Cook said way back in 2015 that the time when the US was capable of manufacturing at this kind of scale is long gone.
China put an enormous focus on manufacturing. The U.S., over time, began to stop having as many vocational kind of skills. I mean, you can take every tool and die maker in the United States and probably put them in a room that we’re currently sitting in. In China, you would have to have multiple football fields.
The best that could happen is “final screw engineering,” where Apple ships essentially-completed iPhones to the US and then applies one or two finishing touches here in order to claim this as the country of manufacture. The company has previously used this tactic in Brazil.
Analysts weigh in
A number of experts have been weighing in on the unrealistic nature of Trump’s dream, with an analyst pointing first to the incredible costs involved.
Dan Ives, analyst at US financial firm Wedbush Securities, […] warned The Guardian that the cost of entirely moving iPhone production to Apple’s home country would be prohibitive for the company – and customers.
“The reality is it would take three years and $30bn in our estimation to move even 10% of its supply chain from Asia to the US with major disruption in the process,” Ives wrote in a note to investors this week. “For US consumers the reality of a $1,000 iPhone being one of the best made consumer products on the planet would disappear.”
He added that if the phones were solely US-made then the cost would more than treble. “If consumers want a $3,500 iPhone we should make them in New Jersey or Texas or another state.”
US investment bank Evercore echoes Cook’s past comments on the sheer impracticality.
“The US economy is not set up to be able to assemble mobile phones. They don’t have the facilities or the flexible labour,” he said. “To train 200,000-300,000 people to come in and assemble iPhones is simply not practical.”
A former Apple engineer too
Arstechnica also cites a former Apple engineer agreeing.
Former Apple manufacturing engineer, Matthew Moore, told Bloomberg that “there are millions of people employed by the Apple supply chain in China,” and Apple has long insisted that the US talent pool is too small to easily replace them.
“What city in America is going to put everything down and build only iPhones?” Moore said. “Boston is over 500,000 people. The whole city would need to stop everything and start assembling iPhones.”
Even if US assembly could somehow be made possible, it certainly wouldn’t be remotely feasible to replicate Apple’s entire Chinese supply chain comprising thousands of companies, so the company would still be importing all of the components – and paying tariffs on those.
The reality is that what Trump wants is impossible, and his threats will eventually be proven empty ones.
Image: Apple
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