Trump thinks we can make iPhones in the US just like China. Yeah, right

One's a world power with extensive cutting-edge electronics manufacturing empire, the other is America

World War Fee President Trump's trade war with China kicked into gear this week. The upshot is Americans face having to pay more for products and components sourced from the Middle Kingdom, as the eye-watering import tariffs on the gear are set to be passed onto them.

Never fear if you're in need of a new iThing, however, as the White House believes Apple will have no problems bringing iPhone manufacturing back to the US from China to avoid these extra taxes.

White House press secretary Karoline Leavitt told a press pool as much in a briefing yesterday when asked whether Trump agreed with statements by his Commerce secretary Howard Lutnick over the weekend, who said "the army of millions and millions of human beings screwing in little screws to make iPhones, that kind of thing is going to come to America." 

Never one to pass up a chance to defend a baseless statement, Leavitt insisted the US was ready, willing, and able to onshore iPhone manufacturing in the face of combined 104 percent tariffs on Chinese imports at the time. That figure jumped to 125 percent today: Amid a stock market meltdown, President Trump paused his retaliatory tariffs on imported foreign goods for 90 days, except for China, which now will have an even greater levy on its products shipping into America.

"There's an array of diverse jobs: More traditional manufacturing jobs, but also jobs in advanced technologies. The President is looking at all of those. He wants them to come back home," Leavitt said. 

[Trump] believes we have the labor, we have the workforce, and we have the resources to do it

Asked when that iPhone manufacturing might actually materialize on American soil, Leavitt dodged the question. But she doubled down on the message: Sure, America can handle it — no problemo.

"[Trump] believes we have the labor, we have the workforce, and we have the resources to do it," Leavitt explained. "As you know, Apple has invested $500 billion here in the US. If Apple didn't think the US could do it, they probably wouldn't have put up that big chunk of change." 

Not so fast

The investment Leavitt is referring to makes no mention of iPhone manufacturing. Apple announced in February a plan to invest over $500 billion in the US over the next four years, but as we mentioned in our analysis of the news back then, the announcement focused on other initiatives — including a new facility in Texas to manufacture servers supporting its AI efforts, not iPhones.

Research and development was a major pillar of Apple's plan, along with the launch of a manufacturing academy in Michigan. That program, aimed at helping small and midsize businesses adopt advanced manufacturing techniques, underscores a key point: Despite the administration's optimism, the domestic workforce, let alone the equipment, materials, and facilities, capable of building iPhones at scale simply doesn't exist.

In addition, Apple leadership has repeatedly acknowledged that relocating iPhone manufacturing to the US isn't realistic, citing supply chain complexity and a shortage of vocational manufacturing skills.

Steve Jobs candidly told Barack Obama in 2011 that iPhone manufacturing was unlikely to ever come back to the US, and Apple's current leader Tim Cook has echoed similar sentiments.

"China put an enormous focus on manufacturing. In what we would call … vocational kind of skills," Cook said on 60 Minutes in 2015. "The US, over time, began to stop having as many vocational kind of skills."

"You can take every tool and die maker in the United States and probably put them in a room that we're currently sitting in. In China, you would have to have multiple football fields," Cook added. 

It would cost me 40 percent to bring it home

When pressed on why Apple wouldn't bring its overseas operations back to the US, Cook said "it would cost me 40 percent to bring it home," which he said wasn't a reasonable thing to do. 

It's not clear whether Apple's position on the matter has changed in the intervening years - we've asked, and haven't heard back. 

Beyond the cost implications for Apple, domestically manufacturing iPhones would likely lead to substantial price increases for stateside buyers. It's either the tariffs or the domestic manufacturing costs; pick one. American citizens don't, by and large for now, want to work for peanuts in factories, with all the surrounding pollution, and the factories would need to be built, too, all of which costs money. Cheap foreigners could be drafted in, yet the current White House regime is happily fostering a heightened hostile environment for migrants. Automation could be maximized, which means fewer jobs are created and requires specialists and research.

Manufacturers could absorb these costs, and reduce their profit margins, and upset investors and retirement portfolios. There are ways forward, with various pros and cons; it's just nowhere near as trivial as the Trump administration is portraying it. Tariffs are a rather blunt approach to what needs coordination between private and public sectors, long-term training and investment, and political nous.

Wedbush analyst Dan Ives estimated this week that a Chinese-made iPhone currently priced at $1,000 could balloon to $3,500 if manufactured in the US. Meanwhile, an April 3 analysis from Rosenblatt Securities warned that tariffs alone could drive the price of the iPhone 16 Pro Max 1TB — currently $1,599 — up to nearly $2,300. And that's before the US-China trade war escalation went into warp.

Saying we can just make this in the USA is a statement that incredibly understates the complexity of the Asia supply chain and the way electronics, chips, semi fabs, hardware, smartphones, etc. are made for US consumers over the last 30 years

"Saying we can just make this in the USA is a statement that incredibly understates the complexity of the Asia supply chain and the way electronics, chips, semi fabs, hardware, smartphones, etc, are made for US consumers over the last 30 years," Ives told CBS News.

Apple, for its part, has tried to diversify away from China by ramping up iPhone manufacturing in India, though progress has been slow and anything but smooth. Infrastructure hiccups, labor shortages, and quality control issues have plagued the shift, and Beijing hasn't exactly been rolling out the red carpet for Cupertino's exit strategy, either. It's rumored Apple has been flying plane-loads of iPhones from India to the US to avoid looming tariffs on that nation alone.

While the US rattles the import tax saber, China hasn't sat on its hands. It fired back earlier today with a reciprocal 84 percent import levy on American goods, and it is methodically making Apple's manufacturing disentanglement difficult.

If Apple tried leaving the country to manufacture iPhones in the US, it'd be unlikely to happen without a fight, and America is unequipped to win without putting the squeeze on shoppers.

Meanwhile, Trump has taken aim at TSMC - the world's most advanced contract chipmaker and a critical Apple supplier - threatening a 100 percent tariff if it doesn't keep investing in US fabs. TSMC is already manufacturing some chips for Apple in the US, and pledged to plow about $100 billion into the States.

Beyond that, Forrester branding and business strategy VP and principal analyst Dipanjan Chatterjee told The Register the "extreme volatility" of Trump's policies is unlikely to make Apple take such drastic action even if, as he believes, the iBiz could afford it without having to pass costs onto Mac and iOS fans.

In such a volatile environment, Apple will be loath to take drastic action that is hard to do and harder still to undo

"If the tariffs prove to be merely negotiating tactics, then they could be temporary," Chatterjee told us. "Even if that were not true, given how far this trade policy is from historical precedent, irrespective of the party in power, it is highly likely it will be reversed in the future."

"Making comprehensive changes to the manufacturing footprint is difficult, expensive, and time-consuming; undoing those changes is just as challenging," Chatterjee continued. "In such a volatile environment, Apple will be loath to take drastic action that is hard to do and harder still to undo."

In other words, saying the US is ready and able to start manufacturing iPhones is a gross oversimplification of an incredibly complicated matter - not that we should expect anything less from the Trump administration. This is the same cadre of folks who thought imposing tariffs on remote uninhabited islands makes good foreign policy, after all. ®