A top goal of President Donald Trump’s hefty tariffs on essentially all imports is to force companies to move their production to the United States. That includes bringing iPhone assembly to America. The problem is, there are huge roadblocks that make that goal virtually impossible.
In broad terms, America doesn’t have anywhere close to the production capacity, or sufficient numbers of workers interested in low-paying factory jobs, to produce an all-American iPhone along with everything else Trump wants made in the U.S. Also missing from the equation: customers thrilled about paying much higher costs for products made in the United States.
The result is shaping up to be years of economic difficulties for Americans.
Good news: iPhone is not made in China
At least part of the reason some people object to the iPhone not being produced in America is because it’s made in China. Except that it’s not. The oft-repeated phrase, “The iPhone is made in China,” is simply wrong.
As Apple CEO Tim Cook (rather awkwardly) put it a few years ago, “It’s not true that the iPhone isn’t built in the United States.”
The reality is that iPhone components are made all over the planet, including the United States. Perhaps the best example is the glass used in the handsets made by Corning in Kentucky. iPhone components sourced from all around the globe go to China or India for assembly.
That’s good news for a possible American iPhone.But the idea that U.S.-made parts will soon be joined by many others newly produced in America to be assembled into an iPhone is an impossible dream.
American iPhone block No. 1: Insufficient production capacity
Suppose Tim Cook bows to the Trump tariffs and decides to build an iPhone factory in the United States. It could be argued that a company with Apple’s huge resources could accomplish this under ordinary circumstances. What we have now are not ordinary circumstances.
The Trump tariffs are intended to force every company to make all their products in the United States. Everything: cars and trucks, every type of clothing, kitchen appliances, TVs, every other type of electric gadget, furniture, building materials, carpeting, every type of food and much, much more. All of these companies are expected to simultaneously build a factory in the United States and start production immediately. And not just of the finished products, but of all the components, too.
In other words, Apple’s efforts to build an American iPhone factory will be enormously hampered by other companies also simultaneously trying to build their own factories.
… and Trump tariffs make U.S. factories too expensive to build
As pointed out by 404media, Trump’s across-the-board tariffs might even block the very construction goal he intends them to accomplish. Ryan Petersen, the CEO of logistics company Flexport, told Bloomberg:
“I talked to two different people who had to pause their factory buildouts [in the U.S.] because of the tariffs, because the machines they were going to buy are too expensive now. Factories require machinery and components from other countries, so if machinery gets really expensive you’re going to have less manufacturing, not more. So I think this is very unlikely to yield the results that they want.”
Plus, consider that it won’t be only U.S. companies trying to build U.S. factories. Take a look at Apple’s supplier list (pdf) and you’ll see that components for its products come from Germany, Italy, Austria, Israel, Japan, Taiwan, Korea and many more countries. If any of these parts are made outside of the United States, they’ll be subject to Trump’s tariffs. It’s not like Apple can easily replace them with American companies, as many of them use proprietary technology in their products.
If Trump’s import taxes were targeted on forcing electronics production to return to the United States, they might accomplish that goal. But instead, they hit everything from soap to soup, and the result has not been good — including a 22% decrease in the value of Apple shares and a 10% drop in the Dow Jones stock index, as of Tuesday.
American iPhone block #2: Insufficient workers
It’s possible that politicians dreaming of factories filled with Americans assembling iPhones might not have thought through the difficulties.
The Foxconn plants in China that assemble iPhones, Macs and other products employ 200,000 people. But perhaps the company’s operation in India is a better example. Foxconn reportedly has about 50,000 employees there. These two numbers give a sense of how many U.S. workers Apple would need to assemble millions of iPhones, Macs, iPads, AirPods, etc.
Hiring those employees to produce an American iPhone would need to happen as the U.S. unemployment rate sits at just 4.2%. Anything below 4% is considered low, so there isn’t much unused capacity.
And keep in mind point No. 1: The Trump tariffs are trying to force every other U.S. company to build its own factories and then staff them at the same time as Apple. Just constructing all the necessary infrastructure will take millions of workers. And all the people needed to build new factories won’t be available to work in them.
Plus, such a shift would ripple through the entire economy. Those new factory workers would come from other industries. A result of the current low unemployment rate, many stores remain understaffed and some restaurants are closing due to a lack of workers. That trend could accelerate.
American iPhone block No. 3: Significant additional labor costs
According to an analyst who spoke to The Wall Street Journal, the cost to pay workers to assemble a single iPhone in China is $30, while in the United States it would rise to $300. That might be pessimistic, though.
For another perspective, a report by the nonpartisan Reshoring Institute found that the average annual salary for a production worker in the United States was about $32,000 in 2022. In China, the average is less than half that: $13,000. And some companies are moving out of China to find cheaper workers. An average Vietnamese factory worker earns about $7,000 each year, while one in India earns $2,000 annually.
Don’t skip over the fact that $32,000 is not a high-paying job in the United States. A couple both earning this comes in well below the U.S. median household income of $80,610 in 2023. That said, with heavy competition for workers caused by increased production (see point No. 2), salaries would almost certainly increase. While that would be welcome news for workers, it wouldn’t be so good for those buying the products they make.
Apple could absorb some additional labor costs, but the company surely would pass some on to consumers. Rising product costs go by another name: “inflation.” And nobody likes that.
Of course, Apple could reduce costs by turning to significant automation to assemble the American iPhone. But it raises questions about the whole point of the Trump tariffs in the first place. It seems a primary beneficiary could be factory robots, not Americans.
American iPhone block No. 4: This is going to take painful years
When considering reshoring iPhone production, the TSMC chip fabs in Arizona that make iPhone processors are an illustrative example. The first of these took five years to open, but the Taiwanese company now reportedly hopes to build follow-up plants within two years.
In other words, the first American iPhone can’t possibly roll off the production line before 2027, and it’ll probably take longer. It might not even be possible, as every other U.S. company draws on limited resources trying to reshore production simultaneously.
As Trump himself says, increasing American manufacturing “should have been done DECADES AGO.” But it didn’t happen then. And now he’s trying to undo something that built up over decades in one fell swoop. As noted here, there are at least four overwhelming reasons why it can’t happen.
And in the meantime, Americans must absorb the cost of the import taxes Trump placed on almost everything they buy.
Ed Hardy has been writing full-time about tech for 25 years, and using it for much longer than that. His intro to Apple was a Macintosh Classic II (which he still has), but now he uses a 13-inch iPad Pro as his primary computer. He’s written for NotebookReview, TabletPCReview, and Brighthand, as well as other sites.
