What if iPhone is built in the US due to high tariff is charged for imports? Would many of US residents/individuals travel to Canada or Mexico buying much cheaper phones (including iPhone if there is an offshore production version for international markets like Canada and Mexico) that are made in China/Korea? Causing significant outflow of US monies!
I was thinking about the same thing. The only way low-end US workers can compete with cheaper foreign labors is to rise the price through tariff on imports. Which makes consumers unhappy.
Or you automate out the workers and bring the manufacturing (i.e. Revenue base back). Instead of $3/hour Chinese labor we will have $0/hour American labor. And consumers will still have higher prices because there will be less competition. Thats what's going to happen. Americas manufacturing base has been decimated and the fixed capex and technical know how to make a lot of stuff has retired or passed this world. It will take over a generation for America to build up the infrastructure to bring prices down once the tariffs go up.
iPhone will lose 2/3 of its valuation because of economies of scale. Majority of iphones is sold in other countries. Once US impose high tariff on imports, other nations will also do the same to imports from US, which make iPhone impossible to sell in other nations. Massive production drives the cost down. When iPhone lose majority sales, cost per unit will drastically increases even with automaton because it won't be able to produce as much as before. Probably iPhone will cost twice as now. I doubt average consumers in US will be able to afford it.
I am wondering whether Apple would still keep producing its products by the existing contract manufacturers, who already own most manufacturing know-hows of portable phones, by asking them to invest capital-intensive automation plants and move the production to the US from China/Vietnam. In return, the CMs would have to negotiate an incentive/subsidy significantly from the US government for the change. As the US facilities then would produce not only iPhone but also other phones for the US market. Many moving parts! And dynamics! While Canada and Mexico are selling competing products made in China/Vietnam with relatively low price tags! Due to many supply chain exposures for many of the electronic components that are currently made in China/Korea/Taiwan! That would have to be air-transported by different suppliers - for incurring airfreight costs that might not be required if both its component and finished product are produced in the same country.
If corporate tax rate is dropped from 35% to 15%, that would mean a $900 iphone has been given $180 discount. Not sure what it actually costs to make a phone, but I don't see Apple paying China $180 per phone, plus other cost like transportation, foreign taxes and so on. IMO, the cost to the U.S. consumer will remain the same, with a possibility of a small decrease. This is just a pro forma estimate, entertainment only.
This whole Trump U.S. nationalism has made the old cost comparisons obsolete. We have become the victims of our own outsourcing. Now we can no longer afford to make anything. We have become charity cases dependent on multi national corporations.
If you bring in the iPhone made out of the country, are you going to hook up to an out of the country cell phone service as in country will know where the phone was made and your monthly bill might reflect an extra heavy tax of using out of the country product, LOL. Doubt the tariffs will go up, but can see one day paying 100% or more tax at register with various counties where USA has imbalance of trade which is almost every country in the world? Can you see paying $900 for a China made toaster? Do you think companies at that point start bringing back plants to make toasters?
Then you have to impose high tariffs on all competitors to keep the iPhone even remotely competitive. In markets where you have plenty of choice (Asian countries) iPhone is losing ground fast because there are $250 alternatives which do the same and more (iPhone's battery is pathetic). Then you have these countries imposing tariffs on US products or making business harder for US companies. US car makers in China will be the losers here. Interestingly, as Europeans were bringing dozens of iPhones from US years ago (myself included - there was a 100% profit when selling one in Europe), the tables might turn and Americans will fly to Europe to escape the tariffs.