Products made in America may inspire pride in U.S. citizens, but the price tag of goods such as in iPhone may be more than residents are willing to pay.
- The latest iPhone model, the iPhone 14 Pro, costs around $1,000. While that is no small amount for most consumers, producing the phone in America would cost more than double.
- One report found that producing an iPhone in the U.S. would cost around $2,400.
- Lower labor costs play a role in the relatively inexpensive products Americans can buy from China, but easy access to parts and manufacturing facilities also makes Chinese production much less expensive.
- Many of the screens, cameras, and storage drives in an iPhone would have to be imported for an American-made product.
Why it’s news
Over the years, many politicians have called for manufacturers to move their production back to the U.S. to promote job growth and, they say, provide less expensive products. However, the intricate supply chain built by China makes that nearly impossible.
Moving a main manufacturing facility to the U.S. is one thing, but moving all the components that go into a product like the iPhone is another. Tax incentives would hardly have an effect on offsetting these costs.
China has spent decades becoming the world’s factory. It could take just as long to build up the same infrastructure and resources in the U.S., USAToday reports. Plus, the United States has stricter labor and environmental regulations compared to China and India, which could lead to increased compliance costs for Apple.
Apple is not the only company intertwined in foreign supply chains. Cameras, Samsung phones, the Amazon Echo, and the Google Pixel are all manufactured overseas and could only extricate themselves at great cost and over a significant amount of time.
That said, moving manufacturing is not an impossible task, just a difficult and time-consuming one. Apple, Samsung, and other manufacturers are shifting their facilities outside of China, but they are not moving them to the U.S. Many are investing in facilities in India, Vietnam, and other south-east Asian countries.
Diversifying the supply chain will take time, but as companies grow more interested in giving themselves more options, it could become cheaper for them to move production back to the U.S. Without complete reliance on China, manufacturers have more flexibility to choose where they build their products.
According to the U.S. Bureau of Labor Statistics, the average hourly wage in manufacturing is around $22, while in China and India, it is significantly lower.