Apple has expressed interest in making iPhones in the United States, but they have run into serious roadblocks. Their recent efforts to move lots of production out of China have largely failed. One of the most pressing challenges is the lack of a comparable workforce in the U.S. that can match the skill and efficiency currently found in China. The Executive Order’s public comment process has already begun to raise questions about the practicality of a ‘Made in the USA’ iPhone.
And as Tim Cook, Apple’s CEO recently noted, there is great value in specialized skills. He explained that the ability to maintain such specialized knowledge in a single place is a major factor of why iPhones are manufactured in China. Foxconn, Apple’s exclusive manufacturing partner, operates sprawling cities in China that enable this type of command and control mass production. These companies’ facilities provide assembly lines but dormitories and transportation for workers.
While some manufacturing efforts have been made in the U.S., such as TSMC’s new factory in Arizona producing small quantities of cutting-edge chips, the overall production capabilities remain limited. And indeed, TSMC has hedged its bets with an extremely strong commitment to Apple as a key customer. As things stand, the U.S. does not have the industrial base needed to accommodate large scale iPhone assembly.
Apple did not respond to questions about their willingness or ability to ramp up iPhone production in the U.S. But previous efforts to locate and build manufacturing plants in America have not produced the outcomes we hope for. The Foxconn factory that was successfully lured to Wisconsin was supposed to produce 13,000 jobs and accounted for 1,454 net new jobs— only half the jobs promised.
Recent tariffs imposed by the Trump administration have added an insult to the injury already inflicted upon American manufacturing. These tariffs now cost products imported into the U.S. a 145% tax, disrupting pricing structures across entire product categories. If these tariffs expire as Trump’s new 90-day hold seeks, Apple’s iPhone 16 Pro Max could increase in price massively if manufactured in the U.S. It is scheduled to go up by as much as 91%!
This relatively simple cost structure for assembling iPhones provides a strong illustration of the difference in labor costs between China and the U.S. In a 2014 estimate, Bank of America Securities analyst Wamsi Mohan predicted physical assembly and testing labor costs for an iPhone made in America would increase to $200 per unit. In comparison, these costs total just $40 in China. This striking contrast is a daunting hurdle to moving production back home.
We’re talking about the new assembly process in China that’s got an enormous labor force working in conditions that make the most of their productivity. At the peak of iPhone 16 production, the worker wage rate at the facility stood at 26 yuan an hour—about $3.63. They got a one-time signing bonus of 7,500 yuan, or roughly $1,000. This cost-effective labor model is almost impossible to replicate in the U.S.
And that’s true. Indeed, the overwhelming majority of all components needed to make an iPhone are created and assembled in Asia. TSMC in Taiwan makes the processors that power America’s devices. While South Korea, home to manufacturers like LG, Samsung, and more, produces displays, much of the remaining components are manufactured in China. Expounding on this incredibly complicated, chaotic global supply chain makes it clear how difficult it is to move production.
Howard Lutnick, Secretary of Commerce commented on the potential for Apple to start making iPhones at home. He commented on the unrealistic expectations surrounding this issue, stating, “It’s just not a reality that on the time frame of imposing tariffs that this is going to shift manufacturing here. It’s pie-in-the-sky.”
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