Vivek Wadhwa: Trump’s Demand That Apple Make iPhones in the U.S. Isn’t Crazy

AP/Vincent Yu
AP/Vincent Yu

From Vivek Wadhwa writing at The Washington Post:

Donald Trump has promised that “we’re gonna get Apple to start building their damn computers and things in this country, instead of in other countries.” He said this at a speech at Virginia’s Liberty University and several other events. It is very likely that he is not serious; Trump tends to say things he couldn’t possibly mean. But he did raise an intriguing question about whether Apple — and other American companies — could bring manufacturing back to the United States.

When American companies moved manufacturing to China, it was all about cost. China’s wages were amongst the lowest in the world and its government provided subsidies and turned a blind eye to labor abuse and environmental destruction. Things have changed. China’s labor, real estate, and energy costs have increased to the point that they are comparable to some parts of the United States. Subsidies are harder to get and Chinese labor is not tolerating the abuse that it once did. China is now a more expensive place to manufacture than Indonesia, Thailand, Mexico, and India according to Boston Consulting Group.

Add to this the efforts by the Chinese government to spur indigenous innovation — by forcing foreign companies to reveal their intellectual property and use local suppliers—and you have strong motivation to relocate manufacturing.

Read the rest of the story at The Washington Post.