President Trump has just blasted Apple in a post on his account on TruthSocial.The president said that he has “long ago informed” Apple CEO Tim Cook that iPhones sold in the United States should be manufactured and built in the United States, “not India, or anyplace else”.He continues by threatening that if this does not happen, “a tariff of least 25% must be paid by Apple”.
The details of the ‘tariff’ are unclear, but the outburst has nonetheless shook investors and Apple company stock has already dropped 3% in response to the announcement.The seemingly-impromptu decree represents a continuation of the sentiment shared by Trump earlier this month, when he said he has a ‘little problem’ with Tim Cook when he heard the news that Apple was diverting iPhone production to India.This originates comments from Apple on its earnings call about how it intends to mitigate the impact of the reciprocal tariffs imposed on goods imported from China (although since, there is a temporary stay on that).
Apple explained that the majority of iPhones sold in the US, in the June quarter, would be made in India.China iPhone production would continue to service the rest of the world.Similarly, U.S.
sales of Macs, iPads and AirPods would be produced from Vietnam manufacturing facilities.Top comment by jgibson2400 Liked by 15 people He's totally clueless.25% is not nearly enough to make it make sense to manufacture in the US even if the US had the manufacturing capacity and skilled labor to do it (which it does not).It would be significantly more cost-effective to raise prices by 25%+ than to turn the iPhone into a $2,500 device.
That isn't going to bring iPhone manufacturing to the USA.One plausible approach to dealing with this nonsense is to create a super high end version of the iPhone.The equivalent of the MacPro where it sells is low enough quantity for a high enough price that maybe one could justify assembling it in the US.Then give Trump a press conference and let him take credit.
View all comments This strategy would allow Apple to minimize the tariff impact, but of course it does not really achieve Trump’s stated aims of bringing manufacturing back to America.Apple has shown little interest in making iPhones domestically, partly due to cost and partly due to the lack of U.S.expertise and available labor.
Even if it was possible, it would probably take a decade to build facilities capable of producing enough units to satisfy the tens of millions of iPhones sold in the US each year.Generally, Apple and Cook have managed Trump very well in this presidency and his prior stint.However, this latest development today suggests the company and the administration may be entering a more contentious phase.
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