A lot of technology is built in Asia, for some fairly simple reasons. As a consequence of a long history of electronics manufacturing, Asian countries have more skilled labor and larger electronics supply chains than the U.S. Altering this would require some major changes not just in U.S. industry, but also foreign policy, education, and free trade policy. So of course, Donald Trump is promising to make that happen.
Trump being Trump, among the many, many things he said at his speech at Liberty University today with absolutely no policy behind it, was this:
We’re going to get Apple to build their damn computers in this country instead of other countries.
Let’s take Trump at face value and assume he understands that an iPhone and a laptop aren’t the same thing, and that he’s specifically promising that Apple will build its MacBooks in the U.S. That’s about 12 percent of what they sell, roughly 14 to 16 million computers a year. That’s ambitious, but not, perhaps, impossible, on a technical level. Let’s also assume he won’t try to force through anti-outsourcing legislation, which would, of course, be rather contrary to any sort of belief in the free market.
It’s tricky, though. Famously, Apple assembles everything in China, but the parts for your average MacBook come from all over the world: America, Taiwan, South Korea, Thailand, Japan, Singapore, and Germany all contribute parts to your MacBook.
The big problem is that Apple doesn’t own, and in fact has little interest in owning, manufacturing facilities. Instead it hires contractors to build everything, which is where the notorious Foxconn comes in. It’s difficult to pin down how much, exactly, it costs Apple to build and ship a MacBook, although there have been some solid estimates over the years, but it’s between $700 and $800, giving Apple a nice profit margin on each laptop it ships.
The savings costs, though, boil down to one word: Labor. Apple’s Chinese workforce makes about $320 a month, and they work 60 hour weeks. In the U.S., one week of wages at 60 an hour, assuming 20 hours are overtime, is about $500. In other words, for Trump to make it viable for Apple to manufacture here, he’d either have to pass absolutely punishing tariffs on imports, which is something he’s supported, or cut the minimum wage down to, according to some back of the envelope math, $1.33 an hour. Trump is for keeping the minimum wage where it is, if you were wondering, although if Trump went around imposing tariffs willy-nilly, he’d likely drive up prices due to less competition and higher labor costs, so those wages would be worth less on the open market. It would also make importing all those MacBook components a much costlier proposition.
In other words, what Trump is promising could, technically, be pulled off. It just would be somewhat poorly considered.