Trump’s Challenges in Moving iPhone Manufacturing to the US
President Donald Trump’s efforts to shift Apple’s iPhone production back to the United States are facing numerous legal and economic hurdles, experts noted recently. One primary concern is the need for automation in the manufacturing of “small screws” used in iPhones.
Trump threatened to impose a hefty 25% tariff on iPhones sold by Apple, although this has not been officially enacted as part of his administration’s ongoing review.
Commerce Secretary Howard Lutonic commented last month that “millions and millions of people are involved in assembling small screws for each iPhone.” However, he later mentioned in a CNBC interview that he relayed to Apple CEO Tim Cook the necessity for automation in the manufacturing process.
According to trade lawyers and academics, if the Trump administration aims to pressure Apple via tariffs, a legal route similar to that used for broader import tariffs could be employed. The International Emergency Economic Powers Act allows the president to act economically after declaring a state of emergency that poses an unusual threat to the country.
Sally Stewart Liang, a partner at Akin Gump, stated that while there isn’t a clear legal pathway for imposing tariffs on a specific company, the Trump administration might attempt to leverage emergency powers to achieve this. However, company-specific tariffs could inadvertently benefit rival smartphone manufacturers, counteracting Trump’s objective of boosting domestic manufacturing.
Experts believe that the Trump administration views the IEPA as a versatile economic strategy. Tim Meyer, an international law professor at Duke University, said that as long as an emergency is declared, it could serve as a basis for substantial economic actions.
A lawsuit from 12 states, contesting Trump’s tariffs at the Manhattan-based International Trade Court, is currently examining whether the IEPA permits such tariffs.
If Trump’s administration prevails in this lawsuit, Meyer suggested that it could simplify the process of imposing tariffs on iPhone imports under the guise of an emergency.
Yet, even if production were to be relocated to the US, it might take up to a decade, and costs could skyrocket to around $3,500 per iPhone, according to Wedbush analyst Dan Ives. In comparison, the latest iPhone currently retails for about $1,200.
Ives remarked that the prospect of manufacturing iPhones in the US is more of a fantasized reality than a viable option. Similarly, Columbia’s economics professor Brett House warned that increasing tariffs on iPhones could drive up consumer prices due to supply chain disruptions and financing issues.
“None of this is beneficial for American consumers,” he noted.
