Trump Believes Apple Could Manufacture iPhones in the U.S.

[bluecoast]

100% of the people who think negatively of Trump's strategy are thinking "quick fix". It is not a quick fix.

Think. Different.

Back in the mid 1990's when western corporations started moving their manufacturing to China, the infrastructure and expertise in China was not there. It had to be built up.

What Trump is doing is kick-starting the growth of that expertise to be built up in the United States. It might take 10 years.

I'd guess those people who criticize Trump's tactics are (a) not thinking long term and (b) see no problem in the destruction of the U.S.'s manufacturing base sliding into 3rd world poverty. That will be the result in 2 generations if nothing is done to stop the erosion. If nothing is done NOW, then in 2 generations, China will be the new U.S. of the latter 21st Century, and America will go the way of past civilizations now consigned to economic basketcase - e.g. Egyptian empire, Ottoman empire, British empire etc.

The fact is, though, that in society 100% of people talk long term, but act short term. Politicians act short term. People act short term, for example, the way they treat their health.

It's like health food and exercise - everyone knows we should act long term, but most don't.

The funny thing is, China - being a totalitarian regime - does think long term because they are not beholden to shareholder short term profits.

Great point.

I’m British and the British empire ended for a number of reasons. But one key reason was after kickstarting the Industrial Revolution, the factory tooling and processes just were not updated after the mid Victorian period.

The main reason seemed to be £££ for the people who owned factories etc.

Then countries such as Germany - and the USA ! - industrialised at a rapid clip from about 1880 onwards, innovating and driving higher industrial output than Great Britain.

Then we had two world wars and the prohibitive cost of running an empire which wasn’t actually thst profitable (and increasingly seen as morally dubious in the inter war years).

The situation isn’t exactly the same in the USA - they didn’t have outsourcing in the Victorian era.

But there is a remarkable similarity where the owners - shareholders - are prioritised over investment in the home territory of these companies.

So I agree with you - erode your industrial base and you erode your country.

We were all told 30 years ago that modern economies were all about the service economy so it was ok to outsource these outmoded manufacturing jobs.

But that’s simply not true.

 

[Nuno Lopes]

Great point.

I’m British and the British empire ended for a number of reasons. But one key reason was after kickstarting the Industrial Revolution, the factory tooling and processes just were not updated after the mid Victorian period.

The main reason seemed to be £££ for the people who owned factories etc.

Then countries such as Germany - and the USA ! - industrialised at a rapid clip from about 1880 onwards, innovating and driving higher industrial output than Great Britain.

Then we had two world wars and the prohibitive cost of running an empire which wasn’t actually thst profitable (and increasingly seen as morally dubious in the inter war years).

The situation isn’t exactly the same in the USA - they didn’t have outsourcing in the Victorian era.

But there is a remarkable similarity where the owners - shareholders - are prioritised over investment in the home territory of these companies.

So I agree with you - erode your industrial base and you erode your country.

We were all told 30 years ago that modern economies were all about the service economy so it was ok to outsource these outmoded manufacturing jobs.

But that’s simply not true.

So true. Hopefully this will not end into a large scale war as previously. Because this time around that only leads to a world where survival is an exception.

We need creative solutions to this challenge and give it a chance.

 

[uacd]

Please elaborate on how people not upgrading their phones increases the used phone user base.

I mean not upgrading due to higher new iPhone cost reasons, in case if tariffs actually bring quite a significant price hike. Thus I believe used iPhone market will explode (and prices gonna go up too). People will still be upgrading to newer models but not so often as they are used to do now, maybe once in 4-7 years. I remember a guy from my uni who had always been buying a used 2 year old iPhone and had always been saying “this is the way”, I thought “well what is the point if you can just upgrade to a new phone once in 4 years”. Maybe price hikes will make that phenomena more widespread – some (like me) will choose to upgrade once in a long time, others will upgrade to cheaper models or 2-3 year old flagships

 

[Colpeas]

I get that. It will, indeed. On the other hand this will increase used iPhone userbase. Right now Apple can do nothing about that, but they can monetize it in various different ways such as subscription-based software updates and even downgrades, putting more money into their services promotion and Apple One (so that more users get hooked onto services bandwagon). Longer update cycle can also benefit them in other, indirect way – new people (new to the ecosystem) will be more eager to try new products if they love their old ones

It’s also good for the planet, if people start seeing their phones / cars / whatever more as luxury items instead of something disposable that gets replaced every other year like it is nothing.
All I am saying that it may be devastating for a capitalist economy that’s built on consumption.

 

[MacFarmer]

Edit: I added screenshot of Howard Lutnick saying that these job coming to America are going to be automated. So maybe not fully automated (yet) like I stated in my original text.

yeah, and Americans will be hired to stand around and lube the robot arms

 

[Velli]

I mean not upgrading due to higher new iPhone cost reasons, in case if tariffs actually bring quite a significant price hike. Thus I believe used iPhone market will explode (and prices gonna go up too). People will still be upgrading to newer models but not so often as they are used to do now, maybe once in 4-7 years. I remember a guy from my uni who had always been buying a used 2 year old iPhone and had always been saying “this is the way”, I thought “well what is the point if you can just upgrade to a new phone once in 4 years”. Maybe price hikes will make that phenomena more widespread – some (like me) will choose to upgrade once in a long time, others will upgrade to cheaper models or 2-3 year old flagships

Sorry, but that doesn’t add up. Demand for used iPhones will go up, yes. But supply on the used market is finite, and the supply will go DOWN, when less people replace their current phone. So used prices will go up, but amount of users of used phones will go down.

What will go up, is sales of low end phones. A 200 dollar Android phone becomes a 400 dollar phone, and consumers will settle for that instead of buying Apple. Whether made in US or not, the brand is likely to be Chinese. So the majority of the profits, which is on the brand not the manufacturer, will go to China instead of Apple.

There is a reason Apple and not Foxconn is/was the most valuable company in the world. Sorry for digressing.

 

[uacd]

Sorry, but that doesn’t add up. Demand for used iPhones will go up, yes. But supply on the used market is finite, and the supply will go DOWN, when less people replace their current phone. So used prices will go up, but amount of users of used phones will go down.

What will go up, is sales of low end phones. A 200 dollar Android phone becomes a 400 dollar phone, and consumers will settle for that instead of buying Apple. Whether made in US or not, the brand is likely to be Chinese. So the majority of the profits, which is on the brand not the manufacturer, will go to China instead of Apple.

There is a reason Apple and not Foxconn is/was the most valuable company in the world. Sorry for digressing.

Definitely, people go for cheapest. On the other hand, most US consumers do not “buy” their iPhones in traditional sense, they pay it off. Given the financial climate and that US will have tariffs too (as well as non-tariff barriers as well, for example fear of Chinese spying), people will probably still be paying off their iPhones every year and then exchanging for a new one to pay off once in 2 years. After all back in 2007 600$ phone was considered a premium (while it offered nothing but a small touch screen, definitely a revolution but people realized it only few years later) – most Sony Ericsson “dumbphones” have been 250$ at most

 

[Velli]

It’s also good for the planet, if people start seeing their phones / cars / whatever more as luxury items instead of something disposable that gets replaced every other year like it is nothing.
All I am saying that it may be devastating for a capitalist economy that’s built on consumption.

I don’t think people will start to see it more as a luxury item. The opposite will happen, people will look at them as necessities, and try to limit the damage of the cost of them as much as possible, either by using them longer or buying “cheaper” (relatively, within the new price ranges) products.

So yes, potentially good for the environment, if people can’t afford the throwaway culture anymore. It will be the most unexpected but positive outcome, if Trump bankrupting Americans results in reducing the global warming he doesn’t believe exists.

 

[Velli]

Definitely, people go for cheapest. On the other hand, most US consumers do not “buy” their iPhones in traditional sense, they pay it off. Given the financial climate and that US will have tariffs too (as well as non-tariff barriers as well, for example fear of Chinese spying), people will probably still be paying off their iPhones every year and then exchanging for a new one to pay off once in 2 years. After all back in 2007 600$ phone was considered a premium (while it offered nothing but a small touch screen, definitely a revolution but people realized it only few years later) – most Sony Ericsson “dumbphones” have been 250$ at most

Still not making sense - will they upgrade less, or not?

 

[ke-iron]

This from the same "genius" that said his sharpie pen could change the course of a hurricane and that inhaling bleach would be a fix for COVID.

Does Trump have factories in the US? I wonder if his Trump Trash merch will still be made in China and if they are exempt from tariffs?

A lot but not all of his merchandise is made in china. I saw a YouTube video on this.

 

[RalfTheDog]

I am so glad I moved to Europe and will never have to step foot in the United States again. The timing was perfect. I sold all of my stock off at the peak, but have yet to open my new brokerage accounts. When I do, I don't think I will ever purchase stock in a company based the United States again.

These tariffs and other policies are why the United States is no longer respected. Even if Trump is removed from office tomorrow, I don't think the U.S. will be respected again. People back in the States don't get just how much hatred his policies have provoked. People are going out of their way not to buy goods manufactured in the United States. That will not change.

 

[RalfTheDog]

I don’t think people will start to see it more as a luxury item. The opposite will happen, people will look at them as necessities, and try to limit the damage of the cost of them as much as possible, either by using them longer or buying “cheaper” (relatively, within the new price ranges) products.

So yes, potentially good for the environment, if people can’t afford the throwaway culture anymore. It will be the most unexpected but positive outcome, if Trump bankrupting Americans results in reducing the global warming he doesn’t believe exists.

I always upgraded my phones when a new model came out. I donated last years phones to someone else. Better to give them to another person than to recycle or just throw it away. Where I live, I expect the cost of the phones to go down. Less sales in the United States will result in more devices available in Europe. That said, I don't think people will look at a product from an American company in a positive light. Europe needs to design their own phones and have their own brands.

 

[attila]

Who is going to man those factories, and how are they going to magic up rare earth minerals?

 

[ke-iron]

About to be a lot of hungry people without jobs as it is right now. This will make things worse.

 

[Cervisia]

Look. You can’t force companies to build industry in a country. Yes you can create conditions for it to be feasible, like for instance TW and China did, or strike specific deals. Yet taxing their products insanely in order to attract Industry never worked. It makes no sense. Yes, that is what Trump is doing in the US. He his taxing everything like no other … electronics is everywhere!

Will see. The way I see it, Winter is Coming if the winds don’t change.

Will see.

You absolutely can. The conditions China created were 200% tariffs on imported cars, which forced car makers to move production there, and they were forced to create joint ventures so China can steal their technology. And now their state-subsidised car manufacturers export cars to Europe and protest the 20% tariffs the EU levies, so they started building factories here..

How China plays the long game in the global auto industry | Article | Hinrich Foundation

Foreign MNEs were vital to the success of China’s auto sector, but many are now lagging behind home-grown companies. We detailed Beijing’s long game of state-backed industrialization.

www.hinrichfoundation.com

 

[Adam Warlock]

Who is going to man those factories, and how are they going to magic up rare earth minerals?

Rare earth elements aren't actually rare and are available all over the world in many countries. The problem, however, is that some deposits are radioactive and even those that aren't require a lot of 'dirty' extraction processes, ones which China doesn't care about. The US used to be leading producer of these elements in the 80s and 90s whereas China's output was next to nil at that time, so it's not like China is the only possible place to get these minerals from. Vietnam, for example, has the world's second largest deposits from what I read. Anyway, my point is that while it may take some time we _can_ decouple from China. After all, the West created modern China with our money and technology, so it's not like we couldn't live without them. We did quite nicely before and are more than capable of doing so going forward. In fact, it's probably necessary to the West's survival.

 

[Cervisia]

Winter was coming either way. You can't rack up nearly $37T in debt with trillions more in unfunded liabilities, and monthly trade deficits in the hundreds of billions of dollars and not face a day of reckoning.

The US has been on an unsustainable economic path for since the 60's. It all started with Johnson's guns & butter.

The most important thing that the USA produces and exports is the dollar itself. And the trade balance doesn't include the profits US companies repatriate, and that figure is in the same order of magnitude. It's not the trade deficit that creates government debt, but overspending.

 

[Cervisia]

Nice try, but no. It’s not about “pricing themselves out of the market.” It’s about the decoupling of American wages from the nation’s prosperity back in the 80s thanks to Reagan and “trickle down economics.” If you want to accept garbage wages because you are okay with having no other options, that’s on you. Don’t expect the rest of us to live that way.

View attachment 2500577

You are comparing an average with a median. Median means what the one guy in the exact middle earns. If the GDP growth was fuelled by earners it the top 50%, like software engineers, which is kinda the case, then the median income will NOT reflect how their income changed at all.

But hey, what's a small lie when you have the opportunity to blame Reagan , right? And surely not Clinton who signed free trade agreements and made US blue collar workers compete with the developing world with their wages...

 

[danny842003]

The most important thing that the USA produces and exports is the dollar itself. And the trade balance doesn't include the profits US companies repatriate, and that figure is in the same order of magnitude. It's not the trade deficit that creates government debt, but overspending.

And not creating an equitable tax system because the government is bankrolled by lobbyists.

 

[0049190]

Those are what Apple Pay’s Foxconn per assembled iPhone. Facts. Public knowledge. You can look it up.

Where can I look it up? Can you please provide a link to the source of your data.

 

[laptech]

Control the economy and manufacturing can return to the US. Same with many other countries. Anything that causes a persons (employee) living costs to increase means it makes it more difficult for a manufacturer to make a profit because that employee will request/demand pay rises so they can afford to pay rent/mortgage, pay for utility bills, pay for food, pay for transport, pay for clothing. The more increase in wages the less and less profit the company will make. The manufacturer themselves have to consider cost of rent, utility bills, numerous government and employee taxes, employee benefits and other perks, which again will affect profit. The manufacturer has to factor in import costs for parts needed to assemble the final product.

Manufacturing in the US and manufacturing in another country where everything is cheaper is what makes a company a millions dollar company, a billion dollar one or a trillion dollar one. The cost of living in the US is too high therefore it does not make financial sense for ANY manufacturer to set up in the US. Yes the government can given benefits to manufacturers to make it financial sense but what happens when the term period of those benefits ends which causes all prices to go back to normal causing it to no longer make it financial sense to stay in the country?

Thousands upon thousands of companies around the world have done just that, been given contracts of 10-20 years where everything has been reduced for them and when that contract ends and the costs increases the companies leave and move to another country where it is cheaper to operate in.

ANY company can setup manufacturing in the US but it must be financial beneficial for them to do so and that is what the Trump administration is failing to tell the public.

 

[Velli]

I always upgraded my phones when a new model came out. I donated last years phones to someone else. Better to give them to another person than to recycle or just throw it away. Where I live, I expect the cost of the phones to go down. Less sales in the United States will result in more devices available in Europe. That said, I don't think people will look at a product from an American company in a positive light. Europe needs to design their own phones and have their own brands.

I don’t think Apple’s pricing strategy works like that. They have famously short stock times, and relying on sub suppliers means they are very agile in terms of raising or lowering volumes. So their cost of reducing sales (meaning, costs outside of lost revenue) is low. But the resistance towards buying American is real.

Europe (Scandinavia) used to be a major player in the phone market. Disruption is certainly the time to introduce new brands, but they will still be manufactured in Asia. I do see a closer collaboration between EU and China being the result of this, if nothing else then because China will be pushing for it.

 

[Velli]

Where can I look it up? Can you please provide a link to the source of your data.

Not sure you’ll want to put your finger there.

 

[Mike_Trivisonno]

A lot of my old Apple Computer, Inc. stuff says "Made in California". Used to be normal for computers to be made in America.

 

[Velli]

You absolutely can. The conditions China created were 200% tariffs on imported cars, which forced car makers to move production there, and they were forced to create joint ventures so China can steal their technology. And now their state-subsidised car manufacturers export cars to Europe and protest the 20% tariffs the EU levies, so they started building factories here..

How China plays the long game in the global auto industry | Article | Hinrich Foundation

Foreign MNEs were vital to the success of China’s auto sector, but many are now lagging behind home-grown companies. We detailed Beijing’s long game of state-backed industrialization.

www.hinrichfoundation.com

Good article. They key is in the first paragraph: “decades-long”. Not by throwing a hand grenade into world economics. In other words: They were smart. What Trump is doing is… not smart.


From the article:

“Though China’s auto industry has not developed as China’s leaders planned, it shows that long-term policy commitment, technological change, massive state resources, and the influence of the Chinese Communist Party-state have an enormous impact“

Massive state control over private companies doesn’t quite sound like it would go down well with Trump voters, but it is what is needed - plus time - to achieve what Trump claims he is doing. I wonder if the American people will realise this before it is too late. Who knew that Trump would be the one to convert the US to communism.