US President Donald Trump has been doubling down on countries by imposing extraordinary tariffs on them, in a bid that he says will bring back manufacturing to America. With China hit with a massive 145 per cent tariff, companies like Apple might be forced to move their manufacturing units to the US. The White House is anticipating that eventually, these tariffs would pressurise companies like Apple to make popular products including iPhones in the US.
Even after moving some iPhone manufacturing units from China to countries like Vietnam and India, China still remains Apple’s largest base to make the smartphones and other devices. Donald Trump on Sunday said he will impose a separate tariffs on smartphone imports, raising fears. His vision is clear, the US President wants companies like Apple to make iPhones in the US.
But is that even possible?
Steve Jobs’ warning to Barack Obama
Manufacturing iPhones in the US may not be as easy as it sounds. An old 2012 report in the New York Times explains exactly why.
The NYT report, which has got back attention, reveals a candid conversation between Apple founder Steve Jobs and then-President Barack Obama, where the late tech titan explained to the leader why US may never be able to manufacture iPhones again.
In a private dinner held in February 2011 by Barack Obama, months ahead of Steve Jobs’ demise in October that year, the President asked him, “What would it take to make iPhones in the United States?”
“Why can’t that work come home?” Obama asked Jobs.
The Apple founder had a blunt response to Obama’s question. “Those jobs aren’t coming back,” he said, according to NYT quoting a guest at the dinner.
The report said that Apple executives at the time believed that the sheer number of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers as opposed to their counterparts in America are better.
Why can’t Apple make iPhones in US?
As per a report by the Associated Press, the disincentives for Apple shifting its production domestically include a complex supply chain that it began building in China during the 1990s. It would take several years and cost billions of dollars to build new plants in the US, and then confront Apple with economic forces that could triple the price of an iPhone, threatening to torpedo sales of its marquee product.
If Donald Trump announces tariffs on smartphones, Apple is widely expected to eventually raise the prices on iPhones and other popular products because the Silicon Valley’s supply chain is so heavily concentrated in China, India and other overseas markets caught in the crossfire of the escalating trade war.
Apple has committed to invest $500 billion and add 20,000 jobs in the US during the next four years. The pledge was an echo of a $350 billion investment commitment in the US that Apple made during Trump’s first term when the iPhone was exempted from China tariffs.
