U.S. President-Elect Donald Trump is promising “very large tax cut for corporations” to bring tech manufacturing stateside again.
In a wide-ranging interview with the New York Times, Trump relayed a conversation he had had with Apple CEO Tim Cook:
“I got a call from Tim Cook at Apple, and I said, ‘Tim, you know one of the things that will be a real achievement for me is when I get Apple to build a big plant in the United States, or many big plants in the United States, where instead of going to China, and going to Vietnam, and going to the places that you go to, you’re making your product right here.’ He said, ‘I understand that.’ I said: ‘I think we’ll create the incentives for you, and I think you’re going to do it. We’re going for a very large tax cut for corporations, which you’ll be happy about.’ But we’re going for big tax cuts, we have to get rid of regulations, regulations are making it impossible.”
Trump went on to say that: “Whether you’re liberal or conservative, I mean I could sit down and show you regulations that anybody would agree are ridiculous. It’s gotten to be a free-for-all. And companies can’t, they can’t even start up, they can’t expand, they’re choking.”
Japanese website Nikkei Asian Review, in a recent report, said Apple had requested Foxconn, its Taiwanese manufacturer, look into the feasibility of brining iPhone production to the U.S. The cost while, notably higher, is not necessarily prohibitive. Perhaps the biggest problem is the lack of labor force in the U.S. with the skills necessary to manufacture the handsets.
Cook, in a past interview with CBS’ Charlie Rose, talked about the difficulties of producing iPhones and other Apple products in the U.S. due to lack of skilled labor.
“China put an enormous focus on manufacturing,” Cook told Rose. “In what we would call, you and I would call vocational kind of skills. The U.S., over time, began to stop having as many vocational kind of skills. I mean, you can take every tool and die maker in the United States and probably put them in a room that we’re currently sitting in. In China, you would have to have multiple football fields.”
Then there is the headache of tariffs. Trump has said he might slap tariffs on imports from Asia to prevent Apple from manufacturing there. China, however, has said it would do the same to iPhones made in the U.S.
What it comes down to is there are no easy answers. It will be interesting to see if Trump recognizes the futility of this particular quest, or if he will forge ahead.
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