If President Trump makes Apple manufacture in the US, could they do it?

Trump says he'd tax Apple at 35% if they don't make their products in the US

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Gage Skidmore/Flickr

Donald Trump’s campaign to become President of the United States has been nothing if not entertaining. Would he make a good POTUS? I have no idea. That probably depends on what your definition of “good” is. But one thing would be certain, it would be an interesting presidency when you consider the changes he proposes; not the least of which is his plan to make Apple start "building their damn computers and things in this country instead of other countries.”

Trump said that he’d impose a 35% tax on American corporations that don’t manufacture their products in the US. As nice as the idea of bringing jobs back to America is, there are three serious issues with forcing companies like Apple to do such a thing.

The first is that products such as the iPhone would become more expensive by something between $5 and $70 (it depends on who you talk to about this) but the consensus seems to be north of $50. Unless the US implemented tariffs on imported smartphones (which would have serious repercussions in US relations with China and other countries) or provided Apple with compensatory tax breaks, even a small price hike would damage Apple’s market share enormously.

The second is the question of Apple’s supply chain which relies on thousands of suppliers. Would those components have to be sourced in the US? This seems to be a huge and intractable issue if they had to be.

Finally, there’s the issue of a workforce to do the production. It is estimated that something like one million workers in China are involved in Apple’s iPhone production. Unless a lot of those jobs could be performed be automated assembly lines, sourcing that many bodies in the US would be impossible and, due to US workplace and environmental regulations, there’s no way US manufacturing could pivot fast enough to meet the changing demands.

The proposition of bringing manufacturing of this kind back to the US is, however, enormously appealing and you can see how the promise of jobs (even such a vague one) will resonate with many Trump supporters.

Of course, implementation of such a policy would be infinitely harder than merely waving your hand during a stump speech and saying “it should be so” but it’s consistent with Trump’s overall strategy of negotiation: Ask for way more than is reasonable and then work backwards to find common ground. 

If you’re in a company that outsources manufacturing to China or anywhere else, this might be a good time to start thinking about what the consequences might be for your organization of the US winding up with President Trump. 

Oh, “that’ll never happen!” you say? I think there’s a good chance it will and so does Scott Adams, the creator of Dilbert (check out his posts on Trump but make sure you read them in the order from oldest to newest).

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Copyright © 2016 IDG Communications, Inc.

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