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The trade dispute triggered by Donald Trump is expected to result in a new manufacturing of industrial products in the United States. But what would an iPhone cost to Apple, for example, that would have been manufactured only in the United States?
Illustration: Anja Lemcke
"Apple Design California, made in China." This reference is mentioned millions of times on the iPhone cases of the American company Apple and symbolizes the fact that China has been high over the decades on the established world. Donald Trump, the US president, has been a long-time example.
Already in his life as a real estate mogul, Trump had warned that the United States would be exploited by the rest of the world. As president, he has now fomented a trade dispute with China and has already imposed about half the volume of Chinese exports to the United States with additional duties. This should make production more expensive in China, which should allow jobs to return to the United States.
There is a lot of if and of but on this idea. But beyond all legitimate objections, what would it mean for American consumers if you actually made Apple smartphones true to the motto "America foremost"?
Financial analyst Sundeep Gantori of the big bank UBS calculated what would happen if the production of the iPhone was gradually transferred to the United States. On the basis of this analysis, the NZZ has developed three variants of a "Trump phone" with the help of Gantoris and has broken down each of these three variants according to the following criteria:
- What proportion of production would take place in the United States?
- Which components of the iPhone would be affected?
- How much would the iPhone cost?
- And when would the corresponding model be available, that is, how long would it take to transfer the respective production processes to the United States?
The three versions of a "Trump-Phone" look like this, assuming that US production shares are zero and produced mainly in China (simplistic assumption):
Trump-Phone light
Only essentials are produced in America
According to Gantori, this variant would already be possible today. "Pack a product or use the operating system – both are not witchcraft," says UBS expert. In fact, a change in these simple activities would make a Trump phone 10% more expensive, which would be the price of a current iPhone, which is now charged at 10%.
For considerations must be limited only Washington, although imports from China with additional rights can prove. Government alone can not force companies to produce in the United States with this tool alone. One possibility for Apple's suppliers would be to have them manufactured outside of China in countries that do not apply tariff penalties. Despite rising labor costs in China, however, there has been no significant exodus from China as Chinese clusters provide cost advantages for producers and suppliers. relatives. With higher US rates, this could change.
The Trump-Phone basic
Possible option if trade conflict continues to intensify
This variant of an iPhone would materialize if Trump realized his threats and increased customs duties on Chinese imports such as the iPhone from 10% to 25% currently. Apple would still however need one to two years to Americanize its production to that extent.
Simple work steps and the production of simple parts could be moved fairly quickly. For more complicated components, it looks different. One may wonder how quickly subcontracting firms would build US factories or look for other opportunities outside the US first. It can also be assumed that the number of new jobs would be rather low in the beginning. Moreover, probably because of the relatively high labor costs in the United States, the automation of production would be pronounced.
The patriot Trump-Phone
Too expensive, too late on the market – just something for true patriots
A completely American Trump phone will probably remain a dream. First, a smartphone made entirely in the United States would cost significantly more than a simple product made in China, with 25% tariffs.
Secondly, in the United States, the know-how of many production processes is currently lacking. "Building a cell phone camera is an art, and it took years to implement this specialist work in China on an industrial scale," Gantori said. It is illusory to think that it is easy to produce a cell phone camera in the United States. It would take at least three or four years to bring back to the United States complex stages of the production process.
The iPhone example shows the advantage of trade: because of the international division of labor, products can be produced cheaply. Unfair commercial practices must be denounced. A trade dispute with punitive tariffs is the wrong way to do it.
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