Rotten Apple: Donald Trump Would Hike iPhone Cost By At Least $50
After basking in his primary victories on Tuesday night, Donald Trump went straight into talking about Apple ( APPL ). “We will some day in the not too distant future — if I win, otherwise it’s not going to happen, I have to be honest with you — but Apple and all of these great companies will be making their product in the United States, not in China, Vietnam … and we’re not going to be losing our companies.” It may seem far-fetched that Apple would bring its iPhone assembly to the U.S., as Trump has been promising, but some tech analysts have been doing some back-of-the-envelope calculations to see what it would take. It would probably take a massive tariff on U.S. imports from China of the sort that Trump has contemplated to get Apple to even take the idea seriously, given the massive undertaking that it would involve. Even then, Apple would be in a no-win situation, seeing its production costs surge, facing import tariffs on components that it mostly sources from other countries, and getting caught in the middle of a trade war that would surely devastate its sales in China. Citing estimates by electronics repair specialist iFixit and telecom research firm IHS Technology, online technology publication Motherboard reported that building the iPhone 6S in the U.S. would add $50 , or 21%, to the $236 production cost. Much of the rise is due to wage differentials — assuming that the jobs would be relatively low-paying if they came to the U.S. Business Insider reported that Apple iPhone assemblers at one plant make $1.82 an hour . Another analysis, from AppleInsider, finds that moving production to the U.S. would raise overhead by 35% — even if the jobs paid minimum wage and robots replaced some of the labor. If imports of components faced large tariffs, costs would have to rise much more. Shifting iPhone assembly to the U.S. would have to be done a little at a time, given the massive effort involved to hire, train and ramp up production. It’s hard to envision how it could happen smoothly in the middle of a trade war. Trump has previously implied that his policy positions are like the opening bid in a negotiation, but this opening bid looks like campaign fluff.