Prices for cell phones and other consumer electronic products will skyrocket in the U.S. as the result of Trump’s ‘Don’t Make It In China policy,’ according to Dow Jones Business News
“I’m going to get Apple to start making their computers and their iPhones on our land, not in China,” Mr. Trump said in March.
Unfortunately, the U.S. lacks the component base, or supply chain needed to manufacture cell phones and other consumer electronic devices like computers, televisions and appliances. As a result, Apple and other manufacturers will face soaring parts costs and be forced to buy and ship needed semiconductor devices from China.
In addition, America’s rigid labor laws, and its critical lack of skilled electronics workers will further drive up costs, putting many items out of reach of millions of of Americans. Stiff tariffs on Chinese imports could accelerate the migration of electronics factories from China to lower-cost Asian countries like Vietnam, rather than boosting U.S. electronics production, some analysts warn.
A Snag in Donald Trump’s Pledge to Make America Make Again: Asia
HONG KONG–Asia’s sophisticated electronics supply chain and massive labor pool are two obstacles standing in the way of President-elect Donald Trump’s pledge to make U.S. companies bring manufacturing jobs home.
When Jabil Circuit Inc., the world\’s third-largest contract manufacturer by revenue, needed to quickly ramp up production of its electronics components a few years ago, the company was able to add 35,000 workers in China in less than six weeks.
Jabil’s experience underscores the integral roles of China’s armies of migrant workers and Asia’s decades-old supply chain in global electronics production. It is an issue Mr. Trump will need to address if he wants to bring large- scale production back to a U.S. economy that Washington, D.C. think tank Economic Policy Institute estimates has lost more than 5.4 million manufacturing jobs and 82,000 factories between 1997 and 2013.
“I’m going to get Apple to start making their computers and their iPhones on our land, not in China,” Mr. Trump said in March, a theme he repeated throughout his campaign. “How does it help us when they make it in China?”
The president elect has threatened to impose a 45% tariff on Chinese imports to the country. This move could hurt companies manufacturing in China such as Apple, Dell Technologies, and HP Inc. It would drag down China\’s GDP by 4.8% and Chinese exports to the U.S. by 87% in three years, according to Daiwa Capital Markets Hong Kong\’s Kevin Lai.
To be sure, there is uncertainty as to whether Mr. Trump will tone down his campaign rhetoric as President. He has indicated potential for compromise in other policy points since his election last week.
A stiff tariff on Chinese imports could accelerate the migration of electronics factories from China to lower-cost Asian countries like Vietnam, rather than boosting U.S. electronics production, some analysts warn.
Apple, in a statement, said it has created over 2 million jobs in the U.S. for engineers, retail and call-center employees and delivery drivers. The company said it works with more than 8,000 suppliers in the U.S. and is “investing heavily in American jobs and innovation.”