Trump's Push for US-Made iPhones Faces Reality Test

Bloomberg's Matt Gurman talks Apple's efforts at diversification as the tech giant's main production hubs are hit by steep tariffs on China.

For US President Donald Trump, there would be few bigger victories than having a domestically produced version of the iPhone, one of the most popular tech products in history. Such a prize would validate his tariff plan and campaign promise to bring manufacturing jobs back to America.
And the administration clearly feels this is an achievable goal, especially in the face of the 145% tariffs that it aims to impose on imports from China, Apple Inc.’s current manufacturing hub. The company also has vowed to invest $500 billion domestically over the next four years.

This week, the White House made its stance clear: Trump wants Apple to begin building the device in the US. “If Apple didn’t think the United States could do it, they probably wouldn’t have put up that big chunk of change,” White House Press Secretary Karoline Leavitt told reporters. 

But the reality is far different. Apple is unlikely to move iPhone production to the US in the foreseeable future for a variety of reasons, including the shortage of facilities and labor needed to produce the devices. Moreover, the country lacks the rich ecosystem of suppliers, manufacturing and engineering know-how that — for now — can only be found in Asia.

The company also is more focused on turning India into its new source of US-bound iPhones. Apple’s partners are building the world’s second-largest iPhone plant in that country, decreasing the company’s reliance on China. 

Apple’s biggest FATP facilities — short for final assembly, test and pack-out — are massive and incomprehensible to many people outside of Asia. They are almost towns themselves, with several hundred thousand people, schools, gyms, medical facilities and dormitories. One major iPhone factory, a complex in Zhengzhou, has even been dubbed iPhone City.

“What city in America is going to put everything down and build only iPhones? Because there are millions of people employed by the Apple supply chain in China,” said Matthew Moore, the co-founder of a startup and a former Apple manufacturing engineer. “Boston is over 500,000 people. The whole city would need to stop everything and start assembling iPhones.”

A representative for Cupertino, California-based Apple declined to comment. 
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