President Trump has taken issue with Apple’s India manufacturing plans, as the company works to lessen its reliance on China.
Apple has relied on Chinese factories for years, but has recently been moving a substantial portion of its manufacturing to India and Vietnam, especially as the trade war between the US and China has intensified. It appears Trump is not a fan of the move, however.
“I had a little problem with Tim Cook yesterday,” Trump said, via CNBC. “I said to him, ‘my friend, I treated you very good. You’re coming here with $500 billion, but now I hear you’re building all over India.’ I don’t want you building in India.
“I said to Tim, I said, ‘Tim look, we treated you really good, we put up with all the plants that you build in China for years, now you got build us. We’re not interested in you building in India, India can take care of themselves … we want you to build here,'” Trump added.
Trump has made no secret of his desire to see the US return to its former manufacturing glory. Unfortunately, the reality is far more complicated. As WPN and other outlets have pointed out before, there are reasons electronics manufacturing centers have sprung up in China, India, and Vietnam.
- Much like automotive manufacturing centers, electronics manufacturing centers have a network of support companies that provide all the necessary parts, products, and services required to build a complete product. Even if some manufacturing elements are moved to the US, it will take time for the support network to grow up around it.
- Labor costs in countries like China, India, and Vietnam are much lower than in the US. In addition, while all three countries have labor unions, they lack the effectiveness or power of US unions. As a result, companies like Apple can build their products at a significantly reduced cost overseas than they can in the US.
Given the geopolitical tension, there is no doubt that companies like Apple will begin moving more manufacturing to the US. At the same time, however, it will not be an overnight process, nor will it happen without significant challenges being overcome.