Is Trump’s ‘Made in America’ iPhone a fantasy?

SAN FRANCISCO – President Donald Trump went on the offensive against Apple on May 23, demanding that the company begin making iPhones in the US or pay tariffs of at least 25 per cent on iPhones made abroad.

The ultimatum is the latest in a decade-long push to get the technology giant to move its supply chain. When he first ran for president in 2016, Mr Trump promised voters that he would “get Apple to start building their (expletive) computers and things in this country instead of other countries”.

But instead of bringing its manufacturing home, Apple has shifted production from China to

other countries across Asia, including India

, Vietnam and Thailand. Almost nothing is made in America, and an estimated 80 per cent of iPhones are still made in China.

Could Apple make iPhones in the US?

Yes. Apple could make iPhones in the US. But doing so would be expensive, difficult and force the company to more than double iPhone prices to US$2,000 (S$2,570) or more, said Mr Wayne Lam, an analyst with TechInsights, a market research firm. Apple would have to buy new machines and rely on more automation than it uses in China because the US population is so much smaller, Mr Lam said.

“It is absurd,” Mr Lam said. “In the short term, it’s not economically feasible.”

There would be some benefits to moving the supply chain, including reducing the environmental costs of shipping products from abroad, said Mr Matthew Moore, who spent nine years as a manufacturing design manager at Apple. But the upsides would be trivial compared to the challenges that would have to be overcome.

So why has Apple not started production in the US?

Supply chain experts say that shifting iPhone production to the US in 2025 would be foolish. The iPhone is nearly 20 years old. Apple’s top executives have said that people may not need an iPhone in 10 years because it could be replaced by a new device built for artificial intelligence. As a result, Apple would invest a lot of money that it would not be able to recoup, Mr Lam said.

“I would be surprised if there’s an iPhone 29,” Mr Lam said, noting that Apple is trying to disrupt the iPhone by making augmented reality products like the Vision Pro.

Apple also had a bad experience when it first began assembling Mac desktop computers in the US in 2013. The company had to temporarily stop production when employees walked off the assembly line at the end of their shift but before their replacements arrived. And it struggled to find a supplier that could make enough of the tiny, custom screws it needed.

In 2019, Apple chief executive officer Tim Cook gave Mr Trump a tour of the Texas plant. But recent labels on the computer say that the Mac Pro assembled there is a product of Thailand.

What does China offer that the US does not?

Small hands, a massive, seasonal workforce and millions of engineers.

Young Chinese women have small fingers and that has made them a valuable contributor to iPhone production because they are more nimble at installing screws and other miniature parts in the small device, supply chain experts said. In a recent analysis the company did to explore the feasibility of moving production to the US, the company determined that it could not find people with those skills in the US, said two people familiar with the analysis who spoke on the condition of anonymity.

China has millions of people who migrate around the country to work in factories as Apple revs up production around a new iPhone. They often work from the summer until Chinese New Year, when production slows down, so Apple’s suppliers do not have to pay them for a full year of work. They live in dormitories connected to factories with assembly lines longer than a football field, clustered near component suppliers.

China has a deep bench of engineering talent. In 2017, Mr Cook said the country has enough tooling engineers to fill multiple football fields, while the US barely has enough to fill a room.

“These are sophisticated factories with thousands and thousands and thousands of engineers,” Mr Moore said. “You can’t just pick it up and move it.”

Why has Apple been moving iPhone production to India?

Apple began revving up production of iPhones in India to avoid local taxes on importing iPhones from China. At the time, India was emerging as the world’s second-largest smartphone market behind China. Apple wanted to increase its sales there but could not offer competitively priced iPhones without starting production in the country.

In many ways, India looks much like China did two decades ago. It has a huge pool of engineers and the country has offered factories subsidies that help limit what Apple has to spend to support manufacturing there.

With Indian production increasing, is Apple really becoming less dependent on China?

Not really. Apple still puts together most of the complex components inside an iPhone in China, including displays and modules for its Face ID technology. Those components, which have gone through a process called sub-assembly, are shipped to India, where they are bundled into an iPhone like Lego bricks. The result is a final product that can claim to be assembled in India, even if much of the work was done in China.

In the process, Apple avoids US tariffs, but the dependency on China remains. NYTIMES