Donald Trump’s Latest Pipe Dream: Bring Apple’s Manufacturing to the US

2 minute read
| Analysis

Donald Trump thinks it’s time for Apple to start manufacturing its products in the United States, and told CEO Tim Cook as much. Mr. Trump said Mr. Cook called him, and that he wants to give companies like Apple big tax breaks and remove industry regulations to get new factories in the country. That’s a pretty big dream considering the U.S. hasn’t ever had the production capacity to meet Apple’s needs.

Donal Trump wants Tim Cook to make Apple factories in the United States

Donald Trump to Tim Cook: Make Apple factories in the U.S.

In an New York Times interview, Mr. Trump—the President Elect of the United States—said he got phone calls from both Tim Cook and Bill Gates earlier this week. Apple, Microsoft, and the Bill and Melinda Gates Foundation chose not to comment on whether or not the calls took place, or who may have initiated them if they did.

Mr. Trump told the New York Times,

I was honored yesterday, I got a call from Bill Gates, great call, we had a great conversation, I got a call from Tim Cook at Apple, and I said, ‘Tim, you know one of the things that will be a real achievement for me is when I get Apple to build a big plant in the United States, or many big plants in the United States, where instead of going to China, and going to Vietnam, and going to the places that you go to, you’re making your product right here.’ He said, ‘I understand that.’

He went on to say his administration would use tax breaks to get Apple’s manufacturing in the United States. Mr. Trump told reporters he said, “I think we’ll create the incentives for you, and I think you’re going to do it. We’re going for a very large tax cut for corporations, which you’ll be happy about.”

It’s hard to see big tax breaks for corporations sitting well with Congress considering the sentiment that companies are gaming the system to avoid paying their fair share. Giving companies a way to pay even lower taxes ultimately translates into less money for the government—something law makers have been trying to stop, at least under President Obama’s administration.

Trump Wants Apple Factories

Getting companies to bring their manufacturing into the U.S. will take more than tax breaks in Mr. Trump’s estimation. He says Apple and other corporations shouldn’t be shackled by industry regulations.

“But we’re going for big tax cuts, we have to get rid of regulations, regulations are making it impossible. Whether you’re liberal or conservative, I mean I could sit down and show you regulations that anybody would agree are ridiculous,” he said. “It’s gotten to be a free-for-all. And companies can’t, they can’t even start up, they can’t expand, they’re choking.”

In other words, what we need to bring big-time manufacturing into the U.S. are massive tax cuts for corporations and greatly scaled back industry regulations. That doesn’t, however, take into account that the U.S. doesn’t have—and never has had—the infrastructure to produce on the same scale as China.

Foxconn’s Chinese factories where iPhones, iPads, and a long list of other devices from Apple and its competitors are made employ thousands of workers. The infrastructure to support the work force needed to build iPhones on the scale Apple needs requires what amounts to a city of workers, and that’s what Foxconn built. Its factories are essentially towns with living quarters, places to eat, activities, and other services a community needs.

The thousands of workers Foxconn employs to manufacture the electronic devices we want simply aren’t available in the U.S., and the days of company towns are long gone. This isn’t a matter of bringing jobs back to the country; it’s about creating a manufacturing system that never existed here. Tax cuts and industry deregulation won’t change that.

Apple already manufactures some of its products in the States, albiet on a small scale. It’s possible we could see more Apple production in the U.S., but don’t count on seeing Foxconn’s factories in China close down so all iPhones can be made here, no matter what Mr. Trump wants.

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jackadoodle
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jackadoodle

Hey Jeff,
Apparently pipe dreams come true:
July 2017 announcement: iPhone Supplier Foxconn Announces Second Plant Coming to Michigan in Trump Era

Maybe next time, try less politics in your tech articles. Thanks.

juperl
Member
juperl

Apple plans ‘high-tech manufacturing’ of data-center gear in Arizona for its internal data centers.

“The Arizona effort would mark a rare instance of a US tech company manufacturing and assembling a finished product domestically, where labor costs are higher.”

Link is here on Business Insider

juperl
Member
juperl

Today’s Wall Street Journal reports that “Apple Supplier FoxConn Plans Expansion Into USA.” Link to article is here WSJ Article

Old UNIX Guy
Member
Old UNIX Guy

“The delusional egomaniac with the laughable combover.”

Anybody NOT know who I’m referring to????

Enough said…

gnasher729
Member
gnasher729

To Machole: Can you explain why the Bose manufacturing plant in Collier is for sale? And the one in Blythewood has closed? Could it have anything to do with Bose opening a plant in Malaysia?

Lee Dronick
Member
Lee Dronick

“are things that any politician can change.”

A statesman could, but probably not a politician.

MonkeyT
Member
MonkeyT

As with every other “Bring manufacturing back to the U.S.” argument, his plans ignore the fact that if it were possibly cost-effective, venture capital money would be all over it. But even with a mostly insufficient minimum wage, companies still can’t afford to hire american workers to do this stuff. It’s cheaper to manufacture parts in South America, ship them to China for assembly and ship an assembled product back to the U.S. for sale than it is to build American. That’s a lot of expense to be covered by a “tax break.” That’s not an Apple problem, that’s a… Read more »

Lee Dronick
Member
Lee Dronick

Make America Mac Again

paikinho
Member
paikinho

“This article is very disrespectful to readers who support Trump.” Huh? How does the article mention Trump voters? Mostly it brings up points about several things which have dogged such discussions before. 1. US corporate tax rates are not uniform and in some instances would be considered low. 2. There are difficulties in bringing manufacturing back to the US. 3. Regulations aren’t what drove drive companies to move manufacturing out of the US. Greed did. Now you can disagree with any or all of the points made. None if it is even slightly disrespectful to Trump[ voters unless, unless you… Read more »

Lee Dronick
Member
Lee Dronick

“And, if manufacturing were moved to the US, jobs initially handled by humans would gradually go to robotics as robotics are developed that can handle the delicate assembly of electronics.”

Delivered by selfdriving trucks. Well the good news is we all, those who survived the economic crash and revolution, will become subsistance farmers growing non GMO crops.

Rick Hyman
Member
Rick Hyman

North Saanich has made a key point. Electronics companies in the US do not own the manufacturing plants they contract to build products. Most of the manufacturing plants are foreign owned. They have less incentive to come to the US. 1986: no, the fact that Cook asked a manufacturer what it would take to set up in the US is not a measurement of how seriously he is considering such a move. He very well may have asked at a cursory level so he can say he asked, knowing what the answer will be. Another fact that plays into this… Read more »

fultonkbd
Member
fultonkbd

Everybody relax… Trump said is going to bring back every manufacturing job back. All those American companies are just waiting to pay each and every one of us $40 an hour to put plastic bits together. We will be rolling in the dough soon enough.

Or maybe it will be set up more like Wal-Mart, keep the pay low so we will still need government assistance to make ends meet. While the profits keep coming going up. Who knows?

Who better than Trump to fix all of our problems? That man is pure genius. Trump university. Trump steaks all viable business.

kernel_panik
Member
kernel_panik

This article is very disrespectful to readers who support Trump. It would have been one thing if you said “we examine the claim of Trump to bring Apple manufacturing back to US.”. But you chose a much more rude version of Trump’s “latest pipe dream.”

It’s so sad how bitter and hateful you are.

Member
NorthSaanichBC

Donald Trump: “”Tim, you know one of the things that will be a real achievement for me is when I get Apple to build a big plant in the United States, or many big plants in the United States” Earth to Trump… Apple does NOT own or operated ANY of the plants that assemble its products. Those plants are owned and operated by other companies, and the people that work in those plants are employees of those other companies. Apple employs many tens of thousands of people in the USA. All of them receive MUCH higher pay than any of… Read more »

skipaq
Member
skipaq

The environmental issues are important. When viewed on a worldwide basis would we rather have manufacturing done here or China? Where are regulations stronger? For that matter, where are labor laws stronger? Cheaper iPhones seems a poor trade off when the result is abuse of workers and the environment.

I don’t think we are talking about getting rid of all regulations in order to make progress in manufacturing things here.

Lee Dronick
Member
Lee Dronick

As retired military I can’t help but think someday in future we may not have much choice, but to bring back manufacturing. Then there was the recent story about some cellphones texting home to China, who knows what other such things are hidden in firmware and software, toxic stuff in toys and such. Recently I bought some steel fasteners, they won’t click to a magnet so I am guessing that the ferrous fell out on the way across the Pacific Two way trade is super important to us and others. The nations involved in the TPP are going to have… Read more »

geoduck
Member
geoduck

I just fear that “eliminating burdensome regulations” will end up meaning getting rid of environmental protection, consumer protection, worker protection rules that are there for a reason. Remember, North Korea has 100% employment, but you wouldn’t want to live there.

skipaq
Member
skipaq

President elect Trump was not my choice in the primaries; but I did vote for him in the general. I have mixed feelings about his conservative credentials. When it comes to his trade, regulatory and economic positions, he was saying the same type of things when he was a democrat. He obviously has deep convictions for what you call a pipe dream. Saying that the U.S. cannot bring manufacturing home is just too negative a point of view. Saying that the U.S. has never had a manufacturing system on the scale of Foxconn in China is debatable. I grew up… Read more »

vpndev
Member
vpndev

Sorry, 1986, but your comment just doesn’t hold up to careful scrutiny. Sure, there are some large “campuses” but few of those are primarily doing manufacturing, as the Chinese ones are doing. China has for years had a state policy to encourage manufacturing capacity and, since it’s a monopoly state, eliminates virtually all barriers to achieve that end. The “unfair advantage” is NOT “lopsided trade deals” or “currency manipulation”. Currency manipulation was a thing but that ended several years ago. In fact, China is now propping up its currency the other way! As for the trade deals – it’s the… Read more »

Machole1986
Member
Machole1986

I made an account just to comment on this blatant partisan idiocy. First if their was no chance of Apple moving production from China back to the US. Why is Cook asking Foxconn and his other manufactures to find a way to move production to the US? The very fact he’s asking about how Timmons production means that he is at least considering a move. Otherwise he wouldn’t waste the resources and his relationship with these companies asking this question. As for your “idea”, and I use the word idea in quotations because I can’t really call it an idea… Read more »