Apple is aiming to move the production of iPhones from China to India
According to numerous news reports, Apple is planning to move the production of iPhones for American consumers from China to India. One question regarding President Trump’s trade policy is whether he will determine whether this “friendshoring” strategy is successful or not, given that “made in India” isn’t the same as “made in Indiana.” Apple manufactures watches and iPads in Vietnam. Annual U.S. imports of Vietnamese goods have risen 178% in nominal terms since 2018, when Mr. Trump first imposed tariffs on China during his first term. Last year, they totaled $137 billion, up from $49 billion the year before. Since they want everything created in the United States, some White House officials find these numbers disheartening.
China is a hostile foe that steals American intellectual property, among other things. Moving a company’s supply chain to a friendlier alternative should be viewed as a victory if Mr. Trump’s goal is to reduce the United States’ reliance on China for manufacturing. In order to promote additional such changes, Mr. Trump may decrease tariffs and seek quick trade talks with India and other possible suppliers. Mr. Trump, however, claimed to be doing the exact opposite on “Liberation Day,” declaring new tariffs of 27% on India, 36% on Thailand, 24% on Malaysia, and 46% on Vietnam. Mr. Trump halted the taxes for three months following financial market turbulence, but it’s unclear what he will do next. This lacks the confidence businesses need when choosing where to source or re-source goods.
By the way, that also applies to cellphones. Shortly after Liberation Day, Commerce Secretary Howard Lutnick declared, “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.” “It will be mechanized.” “The greatest resurgence of jobs in the history of America, to work on these high-tech factories,” Mr. Lutnick continued. Since the manufacturing of iPhones in Asia was automated long ago, far beyond human hands twisting screws, Mr. Lutnick is lagging behind. He also overlooks the fact that, given relative production costs, cellphones would be far more expensive if iPhone assembly were moved back to the United States. Finding employees is another issue, as there were about 482,000 unfilled manufacturing positions in the United States in February.
Given geopolitical tensions, Apple has good reason to shift its supply chains out of China, even beyond tariffs. However, requiring the business to manufacture iPhones in the United States is a futile strategy that would harm both Apple and its clients.
