Trump has threatened tariffs to push companies to set up manufacturing in the United States, using Apple’s iPhones as a prime example and even suggesting that the company plans to do so.
Apple has repeatedly clarified why this would not be feasible, a sentiment echoed by CEO Tim Cook a decade ago. Analysts, supply-chain specialists, and a former Apple engineer have all pointed out that manufacturing iPhones in the US is unachievable and would not yield the benefits one might expect.
In a statement from 2015, Tim Cook noted that American capabilities for manufacturing at such a large scale had diminished significantly.
“China has heavily invested in manufacturing. Meanwhile, the U.S. has gradually seen a decline in vocational skills. You could fit all of the tool and die makers in the United States into this room, while in China, they would fill several football fields.”
The most feasible approach would be “final screw engineering,” where essentially finished iPhones are shipped to the US for a few minor adjustments, allowing Apple to claim a domestic manufacturing status. The company has used this method in Brazil previously.
Insights from Analysts
Numerous experts have voiced their skepticism regarding Trump’s vision, with one analyst highlighting the vast costs involved in such a transition.
Dan Ives, an analyst at Wedbush Securities, cautioned The Guardian that the financial burden of relocating iPhone production back to the US would be too high for both the company and consumers.
“In our estimation, it would take three years and around $30 billion to move even 10% of its supply chain from Asia to the US, causing significant disruptions,” Ives expressed in an investor note. “For US customers, the dream of a $1,000 iPhone being one of the best-made consumer products would vanish.”
He further stated that if iPhones were exclusively produced in the US, the prices would potentially triple. “For those wanting a $3,500 iPhone, we should produce them in New Jersey, Texas, or another state.”
Investment bank Evercore reinforces Cook’s previous remarks on the impracticality of such manufacturing.
“The US economy is not structured to assemble mobile phones. It lacks the necessary facilities and flexible labor,” he explained. “Training 200,000-300,000 individuals to assemble iPhones is simply not a viable option.”
Insights from a Former Apple Engineer
Arstechnica has reported on a former Apple engineer who shares a similar viewpoint.
Matthew Moore, a former Apple manufacturing engineer, conveyed to Bloomberg that “millions of people are part of the Apple supply chain in China,” and emphasized that the talent pool in the US is far too limited to easily substitute them.
“Which city in America is going to drop everything and solely focus on building iPhones?” Moore questioned. “Boston has over 500,000 residents. The entire city would need to halt operations and switch to iPhone assembly.”
Even if US assembly could somehow be implemented, replicating Apple’s vast Chinese supply chain, which consists of thousands of companies, would be nearly impossible, meaning the company would still rely on importing components and incurring tariffs.
Ultimately, Trump’s demands are unrealistic, and his threats are likely to be revealed as hollow.
Image: Apple
