Trump Wants iPhones Made in the USA, But Is It Even Possible?

By Douglas A. McIntyre Published May 25, 9:07AM EDT

Key Points

Former President Trump criticized Apple (NASDAQ: AAPL) for shifting iPhone production from China to India instead of the U.S., but logistical and labor cost realities make domestic assembly economically unviable.
Assembling iPhones in the U.S. would dramatically increase costs due to high labor rates and capital expenditure needs, potentially doubling product prices.
Analysts agree a fully automated U.S. manufacturing model would be the only plausible alternative, but such a transition would take years and require massive investment.

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Trump Wants iPhones Made in the USA, But Is It Even Possible? — © 24/7 Wall St

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Transcript:

[00:00:04] Doug McIntyre: Lee Donald Trump still thinks that, we can build iPhones in the United States. Now. It’s funny. He just basically publicly, shamed Cook who did, production from China.

[00:00:20] Doug McIntyre: To India. Yeah. maybe he’s closer friends with the Chinese than I know. Listen, if he were upset and said, I want you to move them from China to the United States. I get it, but I, anyway, it’s too complicated for me to understand

[00:00:36] Lee Jackson: Well, the logistics. Well, and plus it’s, you know what it is.

[00:00:41] Lee Jackson: I mean, it’s the 800 pound elephant in the room. It’s like the, the assembly costs are just so much lower, I mean, to assemble a iPhone and Cupertino, in California you, I don’t even know what the hourly cost would be for people to do that, but it’s certainly a lot more than it would be in, India or, or in Oh, right.

[00:01:08] Lee Jackson: Indonesia.

[00:01:08] Doug McIntyre: It takes you back to what the $3,000 iPhone or the $700 Nike’s mean, The conversation about making these things in the United States has been very simple. You, if you build Nike’s here, you can’t sell ’em for 200, you’ve gotta sell ’em for 700 because of the cost of labor, right?

[00:01:28] Doug McIntyre: iPhone, you’ve got it. Double the price or something. The one thing that no one has been able to say is no one has come up with something you can build. The United States at a similar price, and I believe that because of the cost of labor, that is impossible. I don’t. I can’t think of anything you can make in the United States for less money than you can make it in places with just lower costs of labor, but skilled, skilled workers,

[00:01:57] Lee Jackson: Well, not unless you have a totally robotic assembly facility where you just have some guy going, boom, start the assembly line, build the iPhones.

[00:02:07] Lee Jackson: But yeah, I don’t know how they could quickly ever implement that here.

[00:02:12] Doug McIntyre: And well, look, the other problem you have is CapEx. If I wanna build a factory that can make, where I can make Nike’s or assemble iPhones, I’m looking at, hundreds of millions, if not billions of dollars to build those facilities.

[00:02:30] Doug McIntyre: It’s gonna take me two to three years to build them. Easy, easy. I’m now out towards the end of this decade and I’m still trying to get the economies of scale of a more expensive workforce.

[00:02:42] Lee Jackson: Yeah, yeah. I know what he gonna do, and. While I understand the president’s angst over it, it is just not a quick fix, That’s their leading product. It’s not like they have a lot of other products. You’ve mentioned on numerous occasion max sales have fallen off people like the iPads and all that, but it’s the Microsoft (NASDAQ: MSFT | MSFT Price Prediction) pad that the NFL uses. Yeah, I think it’s called. I don’t think there that there’ll be any short, answer to the President’s, fury with Tim Cook.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.