Even with Trump tariff threats, the Apple iPhone in America is unlikely


LOS ANGELES – President Donald Trump wants to see Apple make iPhones in the United States and has threatened tariffs to convince companies like Apple to move production here.

But for a variety of reasons, mainly dealing with the skills of foreign workers to produce digital devices and lower costs, the idea of ​​bringing the iPhone here is a "pipe dream," says Tim Bajarin, a longtime industrial analyst from Creative Strategies. "That will not happen."

Building an iPhone XS Max, the current top of the line $ 1100 iPhone, would cost consumers more than $ 2000 if it were made here. A 25% price, as threatened by Trump, will add $ 250 or so to the price of the device, which consumers either have to pay or Apple will eat.

An older iPhone (top) compared to the newer iPhone XR (bottom). Older iPhones had much more convenient connectivity options. (Photo: Review / Mark Brezinski)

Apple's main competitor, Samsung, is based in South Korea and builds premium Galaxy phones and others in Korea, India, Vietnam, Brazil, Indonesia and China.

Google has Pixel phones made in China. Amazon's Echo speakers are made there, like most consumer tech products.

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This week Apple asked the government not to impose tariffs on parts needed from China to build the new high-end $ 6,000 Mac Pro computer, but on Friday Trump said no way.

"Make them in the US, no tariffs!"

Apple had announced plans to build a factory in Austin, Texas, to make high-end Mac computers here, but recently changed gears to get them made in China. In January, the New York Times reported on the various problems Apple faced with getting equipment made in Texas, especially problems with getting a specific screw that was only available in large quantities in China.

"The cost of doing this makes it impossible," Bajarin says. The main components of an iPhone – monitor, power chip, RAM, solid state drive and camera sensor – are all made in China.

"The tariff outcome is unlikely to bring wholesale suppliers to the United States," says Sridhar Tayur, a professor at Carnegie Mellon University & # 39; s Tepper School of Business. That said, he notes that there has been a trend for companies to move out of China and look elsewhere because of higher labor costs, human rights violations and environmental issues.

Bajarin says Vietnam has been the recipient, and many companies received tax breaks to set up shop in Asia. Action camera manufacturer GoPro moved its US production to Mexico in June, while still creating cameras for other countries in China.

China's Foxconn Technology Group, which builds iPhones for Apple in Shenzhen, announced with great fanfare two summers ago that it would partner with Trump and build a facility in Wisconsin to create TV screen panels. The company said it would spend $ 10 billion on a new plant, creating as many as 13,000 jobs. The state offered the company a controversial $ 3 billion in state incentives to make the move.

However, as the Milwaukee Journal Sentinel, a member of the United States TODAY network, reports, the plant has not yet been built, and "it will be significantly smaller and less expensive than the type of plant specified in Foxconn's contract with the state." [19659022] Tayur says that the experience of Foxconn in Wisconsin shows the dangers of Chinese subcontractors moving their business to the United States. "If Foxconn can't make it happen, I don't see how others can," he says.

Readers: What would you do with a $ 250 charge on an iPhone? Switch to Android or pay the price? We'd love to hear from you on Twitter, where I'm @jeffersongraham

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