A few days ago we informed you that because of US-China trade war, some Apple products (such as MacBook, Mac mini, iPad, HomePod, Apple Watch, AirPods, AirPort, Apple Pencil, Beats products, chargers, and adapters in general) may be priced higher. Apple, of course, complained about the situation formally by sending a letter to the Office of U.S. Trade Representative (something like the Office of the US Trade Representative) and elucidating the reasons for the government giving up this idea of imposing new tariffs on imported products.
The american president Donald Trump, as we all know, did not keep his opinions to himself and tried to go to Twitter to talk about it. The solution for Apple, according to him? Simple:
Apple prices may increase because of the massive Tariffs we may be imposing on China – but there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China. Start building new plants now. Exciting! #MAGA
– Donald J. Trump (@realDonaldTrump) September 8, 2018
Apple prices may rise because of the soft tariffs we can impose on China but there is an easy solution in which there would be a zero tax, in fact even a tax incentive. Manufacture your products in the United States instead of China. Start building new factories now. Exciting! #MAGA
As the The verge reported, in that Apple does not manufacture anything in the US. The Mac Pro, for example, manufactured there; she recently invested $ 200 million in Corning (which manufactures glass for iPhones, iPads, Apple Watches, etc. screens); Ma, according to Trump himself, would also have committed to opening three new factories in the US (though their purpose was not informed); Not to mention, of course, the soft investment of $ 350 billion over 5 years that the company makes in the American market.
Still, one doesn't move an entire complex production chain like Apple's from China to the US like that overnight. And even with “zero tariff” and tax incentives, this American manufacturing cost is unlikely to be lower than China's. China has several competitive advantages compared to other countries, such as cheaper labor, proximity between partner factories, technical knowledge for complex component manufacturing, among other things.
"Making all of the iPhones parts in the U.S. would push the price of the iPhones components from $ 190 to around $ 600…. 'that same iPhone could cost, perhaps, $ 2,000 at retail.'
That's right. $ 2,000 for an iPhone. "#ChristmasTaxhttps: //t.co/u34FNHUwAz
– Scott Lincicome (@scottlincicome) September 8, 2018
Doing all the iPhone parts in the US would push the price of iPhone components from $ 190 to about $ 600. ”That same iPhone could cost perhaps $ 2,000 at retail.
That's right. $ 2,000 for an iPhone. #ChristmasTax
To get an idea of what this sum of competitive advantages means, attorney Scott Lincicome pointed out on Twitter that an iPhone “Made in the USA” could cost $ 2,000 to the end consumer.