Nov 18, 2016 07:00 AM EST
Trump To Apple: Manufacture iPhones In The US Or Face Heavy Tariffs; Apple Says America Is Not Capable? [VIDEO]
Apple may be facing heavy import tariffs if the company refuses to consider manufacturing its products in the United States. The Cupertino tech giant is saying that America is not capable due to various factors like lack of infrastructure, high costs and unskilled manpower.
Apple recently asked its manufacturing partners, Foxconn and Pegatron, to find out if manufacturing can be moved away from China and into US soil. The request is a response to US President-elect Donald Trump's criticism, asking Apple in many occasions to bring manufacturing jobs back to the American people.
Foxconn is seriously considering the request while Pegatron refused, citing cost concerns as a primary deterrent. It has been a long practice of Apple to manufacture all its iPhones, iPads, and Macs in China where labor is cheap and supplies of components are nearby.
However, with a looming Trump import policy, Apple needs to carefully weigh its options as it considers various factors. Manufacturing in US could potentially double the cost of the product, which can be absorbed by the company or passed on to consumers as reported in 9to5Mac. Apple products are already expensive as it is, making it a risky move for Apple especially when competition in the smartphone industry is almost cutthroat.
If Trump does bow down to pressures from American voters and imposed a heavy import tariff on anything "made in China," it might be cheaper to manufacture in the US in the long run. There is also the possibility that Apple could remain overseas because the cost of building the needed infrastructure and transfer of technology in US soil may be even more expensive than paying the import taxes.
Apple CEO Tim Cook in responding to criticisms regarding its heavy reliance on Chinese manufacturing, have reiterated in the past that it is impossible to make Apple products in the US. He blames the "brain drain" of the American workforce.
Moreover, American labor may not be able to handle the monotonous, labor intensive work that their Chinese counterparts do. Even young Chinese people scoff at the idea of working in factories and would rather drive their didis, the Chinese Uber as reported by NorthCrane.
For now, the possibility that Apple may move its manufacturing base in the US is low, given the impracticality or almost impossibility of the task at hand. What Apple can do is to reach a compromise with the Trump administration to at least manufacture some of its iPhone components at home, which will provide additional jobs to the American people.
Join the Conversation