Kuo: Apple Better Off Taking 25% Tariff Hit Than Move iPhone Production to US

[CalMin]

I'll steer clear of the partisan commentary in this thread, but I believe Kuo has a valid point.

Producing these devices domestically demands a long-term strategy, with billions invested in education, training, and infrastructure. This kind of commitment requires a decade or more of consistent vision.

Unfortunately, the transient and volatile nature of current tariffs doesn't encourage long-term planning. If the true goal is to build lasting infrastructure in the U.S., we should focus on passing laws instead of relying on executive orders. Laws provide the stability needed for the investments and strategic planning that American manufacturing requires for long-term growth.

 

[wmealer]

Trade imbalance at a national level is such a strange metric to choose. Say I’m a poor country selling wheat to the US, why am I expected to spend that revenue on things the US makes ?

Pure trade imbalances in a vacuum (absent tariffs or other barriers) aren't necessarily the problem. It becomes a problem when countries dump their product into the US with minimal tariffs or other duties, but that country then either doesn't allow the US to export goods into their country, or places tariffs so high on our goods that we can't compete for consumers. Reciprocal trade is the answer.

 

[tgwaste]

I'll steer clear of the partisan commentary in this thread, but I believe Kuo has a valid point.

Producing these devices domestically demands a long-term strategy, with billions invested in education, training, and infrastructure. This kind of commitment requires a decade or more of consistent vision.

Unfortunately, the transient and volatile nature of current tariffs doesn't encourage long-term planning. If the true goal is to build lasting infrastructure in the U.S., we should focus on passing laws instead of relying on executive orders. Laws provide the stability needed for the investments and strategic planning that American manufacturing requires for long-term growth.

It DOES encourage long term planning. IN the US.

 

[Scoob Redux]

Absolutely love this for his base! They were so sure that their savior would bring down prices caused by the awful Biden administration. Now, what they'll get is $3500 iPhones! hahahaha. I love it!

 

[Scoob Redux]

Trump just needs to accept some stuff isn't going to be built here. The idea of it sounds great until you get into the details. It's just not happening.

Well, no, it doesn't even sound great on the surface. Anyone with a grasp of basic economics would know that it sounds horrible from the outset.

 

[tgwaste]

Absolutely love this for his base! They were so sure that their savior would bring down prices caused by the awful Biden administration. Now, what they'll get is $3500 iPhones! hahahaha. I love it!

No they wont because no one will buy that.

 

[cjsuk]

I'll steer clear of the partisan commentary in this thread, but I believe Kuo has a valid point.

Producing these devices domestically demands a long-term strategy, with billions invested in education, training, and infrastructure. This kind of commitment requires a decade or more of consistent vision.

Unfortunately, the transient and volatile nature of current tariffs doesn't encourage long-term planning. If the true goal is to build lasting infrastructure in the U.S., we should focus on passing laws instead of relying on executive orders. Laws provide the stability needed for the investments and strategic planning that American manufacturing requires for long-term growth.

Agreed on the first point.

However Kuo misses something much larger. A lot of the raw materials still need to be imported as they just aren't available in any viable quantities on US soil. Once you start playing trade wars, they escalate pretty quickly (refer to Harding's trade war's contribution to the Great Depression) and then you end up with a collapse with no capital and no resources.

If you want to become an isolationist nation on Earth it means starting society again right down to working out where to dig holes in the ground and what you can do with what you have, not some naive idea of what you can continue doing.

 

[The_Gream]

Can’t remember which of this post said it:
The president does not have the legality to issue tariffs out side of like nation security purposes…
This would have to be an act of congress or the house, don’t remember which holds that authority.

 

[Remy149]

Precedent for this style of policy implementation was set long before Trump and the R party were voted back in control. The ineffectiveness and rank partisanship of our perpetually and narrowly divided congress, a by-product of which is never-ending gridlock, is exactly why so few important policies can be codified into law anymore. As a result, the only way a president can implement what he was elected to do is (as Barack Obama famously said) with a phone and a pen, meaning Executive Orders.

Why am I not surprised you are blaming Obama for Trump acting like a king smh

 

[wmealer]

Love to see Apple start manufacturing phones in America but move design overseas since Trump apparently places zero value in the design process.

I'm not following your logic. What would moving R&D outside the US accomplish, exactly?

 

[wmealer]

Why am I not surprised you are blaming Obama for Trump acting like a king smh

That wasn't blame. I only mention Obama to support my point that Trump isn't the first to side-step congress to implement his agenda. Congress has the lowest approval rating of any branch of government (by far), and perpetual gridlock in the legislative branch is the reason the pendulum swings so wildly when the opposite party eventually resumes control.

 

[wigby]

Problem is that if Apple ignores Trump's request to move to the USA - and just pays the 25% tariffs, Trump will just keep increasing the tariffs to 200% or so.

I hope Trump does so that Apple can sue him and win. The President cannot legally tariff as single company.

 

[wmealer]

I hope Trump does so that Apple can sue him and win. The President cannot legally tariff as single company.

That's not what is actually happening. In a press conference earlier today he also called out Samsung for the same. So, presumably this tariff rate will be targeted at any smartphones not manufactured in the US, not specific to Apple as a company.

 

[BaldiMac]

That wasn't blame. I only mention Obama to support my point that Trump isn't the first to side-step congress to implement his agenda. Congress has the lowest approval rating of any branch of government (by far), and perpetual gridlock in the legislative branch is the reason the pendulum swings so wildly when the opposite party eventually resumes control.

Well, except that both Obama and Biden passed the most significant parts of their agenda through Congress. Obama with the ACA and Biden with the infrastructure bill. Both passed significant legislation outside of reconciliation. Biden even had bipartisan support.

 

[Mercury7]

People can nay say all they want but the truth is cook could strike a deal, a third ftom China, a third ftom Indian and a third from the u.s. and cost average them, if there is a will there is a way and Trump wants them made here…. It would behove Tim Cook to say ok

 

[wigby]

That's not what is actually happening. In a press conference earlier today he also called out Samsung for the same. So, presumably this tariff rate will be targeted at any smartphones not manufactured in the US, not specific to Apple as a company.

Yeah but it works the other way too. If Trump gives Apple an exception, what about other companies? They can sue Trump for giving special treatment to a single company when applying tariffs that should affect all companies equally. Doesn't matter anyway, it's all posturing and hollow threats so most likely nothing will happen.

 

[killhippie]

Well at least in Europe we have a very large selection of phones but the iPhone fits with the Mac the iPad the Apple Watch, so once you are deep in Apple land you could now be drowning, as a big orange cloud of vapourware does not understand you can’t just up and move such massive industry and its supply chain to the USA.

Apple would be better off moving out of the US almost which is a no go, it’s like Trump wants them to fail, maybe Elon has a new all USA made phone up his sleeve? Trumps actions make no sense otherwise the us phone market will stagnate or inflate so prices are so high no one can afford an iPhone and Samsung will do fine elsewhere. Maybe Kuo is right and they will take the tariff hit and pass it on but Apples market lead will slip as it can’t afford the latest chips like 2nm and beyond from TSMC for quite a while, so much for the latest and greatest. I’m happy with my 13” M4 iPad my iPhone 16 Pro and my M4 max studio. As I think they will either get expensive or quality will nose dive as Apple look to save money somewhere and that could be internal components and build materials, and maybe quality of the build itself.

I’ll be keeping that 16 Pro for quite a few years it seems now. Maybe Apple will go back to a 2 year update cycle on macOS like the good old days of Snow Leopard and charge for updates. That would be no bad thing considering how buggy things have got. Maybe iPhones should follow that path too. We have reached a point where Apples and its AI is a mess. Everyone else built one but them, yet they had Siri before everyone one else. What happened to this company is just painful and Trump is just making it worse.

 

[tgwaste]

Well at least in Europe we have a very large selection of phones but the iPhone fits with the Mac the iPad the Apple Watch, so once you are deep in Apple land you could now be drowning, as a big orange cloud of vapourware does not understand you can’t just up and move such massive industry and its supply chain to the USA.

Apple would be better off moving out of the US almost which is a no go, it’s like Trump wants them to fail, maybe Elon has a new all USA made phone up his sleeve? Trumps actions make no sense otherwise the us phone market will stagnate or inflate so prices are so high no one can afford an iPhone and Samsung will do fine elsewhere. Maybe Kuo is right and they will take the tariff hit and pass it on but Apples market lead will slip as it can’t afford the latest chips like 2nm and beyond from TSMC for quite a while, so much for the latest and greatest. I’m happy with my 13” M4 iPad my iPhone 16 Pro and my M4 max studio. As I think they will either get expensive or quality will nose dive as Apple look to save money somewhere and that could be internal components and build materials, and maybe quality of the build itself.

I’ll be keeping that 16 Pro for quite a few years it seems now. Maybe Apple will go back to a 2 year update cycle on macOS like the good old days of Snow Leopard and charge for updates. That would be no bad thing considering how buggy things have got. Maybe iPhones should follow that path too. We have reached a point where Apples and its AI is a mess. Everyone else built one but them, yet they had Siri before everyone one else. What happened to this company is just painful and Trump is just making it worse.

MCAP : 2.92T
I think they'll be fine. Stop trying to get cheap labor and start figuring out how to do the RIGHT THING which Apple NEVER does.

 

[TheLocNar]

Apple, like every other company, will NOT absorb tariffs. It's us the consumers who will have to pay.

 

[tgwaste]

Apple, like every other company, will NOT absorb tariffs. It's us the consumers who will have to pay.

The market will dictate this. The US market will not pay $3K for an iPhone.

 

[wmealer]

Agreed on the first point.

However Kuo misses something much larger. A lot of the raw materials still need to be imported as they just aren't available in any viable quantities on US soil. Once you start playing trade wars, they escalate pretty quickly (refer to Harding's trade war's contribution to the Great Depression) and then you end up with a collapse with no capital and no resources.

If you want to become an isolationist nation on Earth it means starting society again right down to working out where to dig holes in the ground and what you can do with what you have, not some naive idea of what you can continue doing.

Isn't the whole idea of free trade, to do exactly that ... trade freely? Of course the US must rely on other countries' certain natural resources which we don't have on our own soil. Fine. Simply import the resources we don't have in abundance, and reciprocate with friendly countries by exporting the resources we do have, without all the unnecessary tariffs and duties put in place by our trading partners. Trump didn't start all these unfair trade practices, but finally there's a president willing to take the political hit by calling it like he sees it and not allowing our trading partners to take advantage of us any longer. Tariff US companies outsourcing their manufacturing until they come to heel. It's short-term pain until equilibrium is reached. Trump wins either way ... Some manufacturers will either come back to the US with hat in hand to reap the benefits of tariff-free commerce, or our new External Revenue Service starts banking never-before-seen revenues from the tariffs these companies would rather pay.

 

[MNLondon]

I wonder what the profit is on an iPhone? They probably make it for $300-400, depending on the model? I can't imagine it would cost much more than that. Yes, it's a superb device with a brilliant ecosystem, but I'm stuck with it because I have so many Apple products. I wish things cost less, such as the music rental service, but there you go.

I wish Apple would give more to us, such as One to One. I really enjoyed learning with an expert and it probably wasn't cost effective, but it was great for the customer. There could be high prices for trade ins too. I have an old 17" MacBook Pro and a 15" MacBook Pro which is even older and a Mac Pro tower; it would have been nice to trade them all in for a new MacBook Air.

I wonder where Apple will go next? Will Tim retire soon? Will there be a cheaper VR headset? Will Apple give iPhones away for free, so they can avoid paying a tariff?

In the past year, I've bought a new iPhone and a MacBook Air M4. I still have my Mac Studio M1 Max, which is still a superb piece of kit. I want to have training on Apple software. That would be my number one ask. They could do it online. Bye for now.

 

[It’s always something]

not allowing our trading partners to take advantage of us any longer.

Trump keeps saying that they’re “taking advantage of us” but never documents it. So here’s a chance for you to do that. How was Lesotho “taking advantage” of the US such that they “deserve” a 50% tariff? What specifically are they supposed to import from us into their tiny little poor country? Is it maybe possible that the fact they’re poor might have a material impact upon their ability to buy our stuff?

 

[Devyn89]

Get a grip. You just explained EVERY politician.

Also inflation of all of life’s essentials started in 2022….. But don’t let facts get in the way of your emotions and more importantly the price of your beloved iPhone!

Sure but other politicians still pretend to not be like this. Trump makes it so blatant it’s impossible to ignore. While it is bad when any politician does it, to pretend it’s not on another level with Trump is naive.

 

[Spock]

That’s something that actually would benefit Americans it’s never happening. He is actively trying to destroy the education system.

Bringing Apple factories to the US would benefit Americans, it would create a lot of jobs.