Donald Trump Wants Apple to Start Manufacturing in the US

Dec 01, 2016 10:31 AM EST
With President-elect Donald Trump's campaign call to "make America great again," he wants Apple to move their manufacturing site from China to the US in the hopes of creating more jobs.
An Apple manufacturing facility in China. Inhabitat.

With President-elect Donald Trump's campaign call to "make America great again," he wants Apple to move their manufacturing site from China to the US in the hopes of creating more jobs. Trump has directed his request to long-time Apple CEO Tim Cook.

Trump is quoted into saying to Cook, "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." Trump says this in connection with Apple's multibillion-dollar annual revenue and its employment of millions of people around the globe.

Trump is also willing to offer Apple tax break and reduced regulatory incentives, as long as they are able to move manufacturing back to the US.

Cook replies with acknowledging the request, but has denied giving further public comments.

This move may be great for Americans in terms of opening job opportunities, with analysts saying Apple is currently employing 1.6 million people within its supply chain. Apple's products are all assembled in China although it is "designed by Apple in California" as all its devices say, and its components are manufactured in China, Japan and Taiwan.

However, it is not as straightforward as it seems.

Seungjin Whang, a Stanford Business School supply chain management professor, says that the US can never compete with China being the global mainstay of manufacturing and supply. He says that it is so easy to find good suppliers in China that asking for quotations in Shenzhen, China is never a problem. Even with hard-to-find supplies, he says "you can find at least 10 suppliers within a day."

This kind of business environment does not exist in the US, and with a steady supply chain already established in China, it is going to be impractical for Apple to move their facility to the US. And it can be financially detrimental. This is the sentiment of Jason Dedrick, professor at Syracuse University's School of Information Studies. He says that with all the time and energy needed to move manufacturing from China to the US, other competitors from Korea and China can have time to catch up. He also says that once Apple decides to start manufacturing in the US, $30-$40 per device should be added to compensate for all the investment and higher labor costs.

But Trump is not fazed, and so are many Americans who want their jobs back. As Trump said on his campaign speech back in January, "We're going to get Apple to build their damn computers and things in this country instead of in other countries."