Apple Reportedly Conducting Feasibility Study Of Trump's Vision Of The American Made iPhone

Apple may be an American company, but the bulk of its products (save for the long-neglected Mac Pro, which is assembled in the United States) are manufactured in China. The relatively low cost of labor, coupled with premium pricing for devices like the iPhone, has allowed Apple to become one of the most profitable companies in the world.

However, according to a new report from the Nikkei Asian Review, during the past year, Apple has at least explored the idea of manufacturing the iPhone in the United States. According to a source for the publication, “Apple asked both Foxconn and Pegatron, the two iPhone assembly plants, in June to look into making iPhones in the U.S. Foxconn complied, while Pegatron declined to formulate such a plan due to cost concerns."

iphone7 plus

Even though Foxconn at least entertained Apple’s request, it too eventually came to the same conclusion as Pegatron. A Foxconn source added, "Making iPhones in the U.S. means the cost will more than double.”

But why would Apple even make such a request if the obvious response would be that it is financially not feasible to pull off? Perhaps Apple was just following up on a contingency plan should Donald Trump win the race for the White House (which of course he did). "We have such amazing people in this country -- smart, sharp, energetic, they're amazing,” said Trump during the primaries back in January.

“I was saying, make America great again, and I actually think we can say now, and I really believe this, we're gonna get things coming. We're gonna get Apple to start building their damn computers and things in this country, instead of in other countries.”

donald trump
President-elect Donald Trump

Trump also threatened to strangle American businesses that outsource to other countries by hitting them with a 35 percent tariff on products once they arrive on United States soil.

Whatever the case, Apple CEO Tim Cook doesn’t seem to be in a rush to bring iPhone production to the United States. "To make iPhones, there will need to be a cluster of suppliers in the same place, which the U.S. does not have at the moment," said Cook during a December 2015 interview with 60 Minutes. "Even if Trump imposes a 45% tariff, it is still possible that manufacturers will decide to continue production overseas as long as the costs together with the tariffs are lower than the amount they need to spend on building and running production lines in the U.S."

Tim Cook
Apple CEO Tim Cook

Apple and President-elect Trump shared headlines earlier this week thanks to an editorial from Global Times, a state-run Chinese newspaper. The paper took Trump to task, and said that he in fact has little power to impose crippling tariffs long-term, writing, “To impose a 45 percent tariff on imports from China is merely campaign rhetoric. The greatest authority a US president has is to impose tariffs of up to 15 percent for 150 days on all imported goods and the limit can only be broken on the condition that the country is declared to be in a state of emergency.

“If Trump imposes a 45 percent tariff on Chinese imports, China-US trade will be paralyzed.”

The paper went on to drag Apple and Boeing into the discussion, writing, “China will take a tit-for-tat approach then. A batch of Boeing orders will be replaced by Airbus. US auto and iPhone sales in China will suffer a setback, and US soybean and maize imports will be halted.”

But of course, this is all speculation at this point. Campaign promises are one thing, but we’ll have to wait until Trump is in office to see how trade relationships between China and the United States are altered and how it will affect companies like Apple.