Trump Press Secretary Karoline Leavitt said during a media briefing earlier today that U.S. President Donald Trump “absolutely” believes that Apple has the resources to move the manufacturing of its iPhone and other devices back inside the United States
A reported asked Leavitt if Trump believed that Apple could bring manufacturing of the iPhone back inside U.S. borders, she replied, “Absolutely, he believes we have the labor, we have the workforce, we have the resources to do it.”
“And as you know, Apple has invested $500 billion here in the United States, so if Apple didn’t think the United States could do it, they probably wouldn’t have put up that big chunk of change,” she continued.
Starting at midnight tonight, products from Thailand, Vietnam, the European Union, China, India, and several other countries will be hit by stiff tariffs. Apple manufactures most of its devices and accessories in some of the affected countries, meaning Apple customers are bracing for a huge jump in the prices of their favorite devices.
Trump had previously said he would place a 54% tariff on products from China, but has since increased those tariffs by an additional 50%, meaning Apple products assembled in China will be hit with a massive 104% tariff.
While Trump may believe Apple could move production back home to the U.S., Apple’s complex supply chain would also need to be moved back to the States, meaning Apple will still face higher costs, due to the price of labor and benefits in the U.S. Then there is the question as to whether workers in the U.S. have the needed skillset to perform the needed jobs.
In 2017, Apple CEO Tim Cook explained why Apple assembles its iPhones in China:
… The popular conception is that companies come to China because of low labor costs. I’m not sure what part of China they go to, but the truth is China stopped being the low labor cost country many years ago. The reason is because of the skill, the quantity of skill in one location, and the type of skill it is.
Like the products we do require really advanced tooling, and the precision that you have to have in tooling and working with the materials we do are state of the art. And the tooling skill is very deep here. You know, in the U.S. you could have a meeting of tooling engineers, and I’m not sure we could fill the room. In China, you could fill multiple football fields. It’s that vocational expertise is very deep.
In an article today, 404 Media reported that U.S. secretary of commerce Howard Lutnick recently made comments similar to Trump’s about iPhone manufacturing recently, saying that the “army of millions and millions of people screwing in little, little screws to make iPhones, that kind of thing is going to come to America.” This indicates that the Trump administration needs to do a little more homework on how Apple operates.
404 Media article also provided a 27-page PDF listing Apple’s suppliers, which are stationed in more than 50 foreign countries. In addition, the rare earth minerals used by Apple to manufacture their devices can’t be mined in the U.S., meaning they have to be sourced from 79 countries.
So, if Apple does avoid the tariffs somehow, they’ll still be hit with greatly increased costs if they do move manufacturing back to the U.S.
