U.S. President Donald Trump's administration has banked on its steep tariffs as a catalyst to shift iPhone production from the Chinese mainland to American soil. However, a closer look reveals significant hurdles that make this transition unlikely.
For nearly two decades, Apple has built a highly efficient supply chain in the Chinese mainland. Originating in the 1990s, this intricate network has been essential to the company’s success. Transitioning to domestic production in the U.S. would not only demand billions of dollars in new investments but also risk a dramatic tripling of the iPhone's price.
Dan Ives, an analyst at Wedbush Securities, captures the sentiment: "The concept of making iPhones in the U.S. is a non–starter." According to his explanation, under current economic realities, a device that costs around $1,000 when produced in the Chinese mainland could cost over $3,000 if assembled in the U.S. Moreover, a domestic overhaul is seen as unfeasible until, at the earliest, 2028.
The trade tensions have already begun to impact market dynamics. Since tariffs began rising on April 2, Apple’s stock price has dropped by 15 percent, slashing the company's market value by $500 billion. While Apple has yet to comment publicly on the tariff strategy, its upcoming quarterly conference call on May 1 with CEO Tim Cook is expected to address these pressing concerns.
This unfolding scenario not only highlights the complexities of reshoring manufacturing in an interconnected global economy but also offers important insights for business leaders, tech enthusiasts, and policymakers. It serves as a potent reminder that decades-old supply chains and economic realities are not easily overturned, even in the face of bold political strategies.
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Why Trump's trade war can't lure Apple to make iPhones in America
cgtn.com
