Pipe Dream? Trump Wants Apple to Move Production to US



Silicon Valley has enjoyed its relationship with Obama, but it is unclear how the world’s largest tech giants will fare under a Trump administration. For example, Donald Trump told Apple CEO that he was going to “get” the tech giant to start manufacturing its products in the United States. This happened when Trump received a post-election phone call from Tim Cook during which he said that if Apple built a big plant (or many) in the United States, it would be a real achievement. Cook said he understood that, and Trump went on to promise multiple incentives through tax breaks and reduced regulations.

Although these were not official negotiations, the direction is quite clear. Apple markets its high-end products as being “designed by Apple in California”, but everyone knows that the electronics are assembled at factories in China from components produced in China, Japan and Taiwan. Overall, Apple suppliers employ over 1.6 million people.

One of the key themes of Donald Trump’s presidential campaign was to force US companies to bring jobs back to the country – which went against his own business’s decision to manufacture apparel in China or Bangladesh. Aside from the promise to get Apple to move its production to the US, Trump also called for a boycott of Apple products unless it acceded to the FBI’s demand to unlock one of the terrorists’ iPhones.

At the same time, industry experts agree that assembling iPhones in the US is impractical and economically unfeasible, since Apple relies on a complex and very large supply chain and manufacturing infrastructure already established in other countries. As for the US, the supply chain to make consumer electronics in volume does not exist there, so moving production to the US is an unrealistic goal before the creation of such a chain. This could take many years. On the other hand, if Apple has to invest in establishing a new supply base in the country, its competitors will take an advantage to catch up with it.

According to tech experts, assembling iPhones in the United States would make them $30-$40 more expensive, primarily due to labor costs and the additional cost of shipping components. This doesn’t take into account the capital cost outlay of building factories.

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