Politics

Apple Mulling Making iPhones In US, Trump Win A Factor

| by Denise Recalde

Apple may soon start producing iPhones in the United States, as a result of Donald Trump's win in the US presidential election. 

Hon Hai Precision Industry, also known as Foxconn Technology Group, a Taiwanese assembler of Apple's products, has reportedly been exploring the option of making iPhones in the U.S., the International Business Times reports. 

"Apple asked both Foxconn and Pegatron, the two iPhone assemblers, in June to look into making iPhones in the U.S.," a source stated.

Foxconn, which puts together more than 200 million iPhones every year in Taiwan, complied with the U.S. company's request, but Pegatron “declined to formulate such a plan due to cost concerns," the source said.

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Though Foxconn is investigating the option, its founder, Terry Gou, stated production costs would rise significantly higher if the Silicon Valley giant moved iPhone production to the U.S., The Daily Mail reports. 

"Making iPhones in the U.S. means the cost will more than double," the source said. Apple's latest 32GB iPhone 7 are sold for $649 but cost $225 to make. 

Apple's mulling of changing the base of its manufacturing to a U.S. site from Taiwan comes during a year when Trump has campaigned, and won the U.S. presidential election, on a platform of forcing American companies to manufacture their products in the United States. Bringing back jobs to the U.S. was a major talking point of his campaign speeches.  

"We're going to get Apple to build their damn computers and things in this country instead of in other countries," Trump said in January, adding he would do so by imposing tariffs on all American companies that manufacture their products abroad.

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"How does it help us when they make it in China?" he said in March.

Several of Apple's iPhone components are produced in Asia: iPhone chips are made by Taiwan Semiconductor Manufacturing Co.; Apple's handsets by Japan Display and Sharp; and other components by South Korea's SK Hynix and Toshiba in Japan. 

Trump's rhetoric on forcing local companies to bring tech manufacturing jobs back to the U.S. won't work, experts have stated. They claim the United States does not have the skilled personnel, manpower, expertise and supply chain capacity that amply exists in China and Taiwan. 

"We shouldn’t be criticized for using Chinese workers," an anonymous Apple executive told The New York Times in January 2012. "The US has stopped producing people with the skills we need." 

In an interview With 60 Minutes, Apple CEO Tim Cook raised a similar point. 

"To make iPhones, there will need to be a cluster of suppliers in the same place, which the U.S. does not have at the moment," he said in the interview.

"Even if Trump imposes a 45% tariff, it is still possible that manufacturers will decide to continue production overseas as long as the costs together with the tariffs are lower than the amount they need to spend on building and running production lines in the U.S," he added.

Sources: The Daily Mail, International Business Times, Nikkei/ Photo credit: Pixabay

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