Republican presidential hopeful Donald Trump unveiled a new plan should he win the election: make Apple to move all of its product manufacturing into the United States. Mr. Trump shared his idea during a Martin Luther King Jr. Day speech at Liberty University on Monday. So much for the capitalist spirit.
Donald Trump: I'll force Apple to make Macs & stuff in the U.S.
Mr. Trump was pretty clear on his plan saying,
We’re going to get Apple to build their damn computers and things in this country instead of other countries.
He also said he'll impose a 35 percent tax on any business producing its goods outside of the United States. Keep in mind Mr. Trump is the same man who said he wants to build a massive wall along the U.S. and Mexico border.
With that out of the way, let's break down what Mr. Trump said. First up, making Apple build its "damn computers and things" in the U.S.
Apple already builds the Mac Pro in the U.S., and has said it would like to bring more of its production into the country. The big problem Apple is facing now is a complete lack of in-country infrastructure to support its production needs.
The iPhone, for example, is built in Foxconn's factories in China—factories built like cities with thousands of employees working on highly tuned production lines geared to build products on the scale Apple and other companies need. Addressing that will require Mr. Trump to fundamentally change in-country production processes.
For Apple, and presumably every other U.S.-based electronics maker, to remain competitive, Mr. Trump would need to find a way to change production systems on a global level, too. Apple isn't the only company using overseas facilities to build its devices.
Next up is finding a way for companies to economically make their products in the U.S. Even without accounting for the lack of a production infrastructure in the country, it's proven to be far more economical to make products outside the U.S. and import them for sale.
In other words, it's logistically and economically unrealistic for Apple and other companies to mass produce in the United States. The country simply can't compete with China in that space.
Next Up: Hello, Tariffs
Hello, Tariffs
Mr. Trump also said he'd impose a 35 percent tax on companies manufacturing outside the United States. Financial penalties are an incentive to manufacture in-country, but raising them to levels where it's economically unfeasible to outsource to other countries doesn't guarantee companies can successfully produce with local resources.
Forcing companies to manufacture in the U.S. when they've already determined it's a bad business move sounds like a recipe for failure. Manufacturers would have to invest huge sums of money into building the factories they need, hiring employees for the facilities, and then train them to work as efficiently as their Asian counterparts. The costs for all of that get passed onto consumers who won't be happy paying substantially higher prices for their new smartphones, toasters, and refrigerators.
In short, Mr. Trump would have to set aside free trade, force companies to change their entire production process, and reinvent the world economy. He certainly has the ego for it, but no one has the ability to make that happen—nor does the President have the authority.
Mr. Trump's easiest path would be to push for steep tariffs on goods brought into the country by local companies, but that's going to be met with steep resistance. Those tariffs would be passed onto consumers in the form of higher prices, and that leads to fewer sales; consumers and businesses lose out.
Over the top statements are par for the course for Mr. Trump, so it's no surprise he's tossing out promises like making Apple bring all of its production into the country. Based on his MLK Day speech, it's pretty clear he isn't well versed on the President's authority and limitations.
It also looks like Mr. Trump, the business man behind several hotels and casinos, comes up a little short on his appreciation for capitalism. Instead, he's calling for heavy handed government control over businesses—something he'd very likely rally against if he wasn't saying it himself.
[Thanks to Gizmodo for the heads up]