But, how tenable is this idea of encouraging another industrial revolution?
Senior business correspondent at BusinessDesk, Dileepa Fonseka, told The Front Page that in the beginning, Trump voiced concern about manufacturing in China.
“Afterwards, we’ve discovered he’s concerned about countries allowing China to continue exporting through them. That’s countries like Vietnam and others allowing China to transship through them, acting like a middleman.
“More recently, you would’ve seen jokes being made about how Trump is basically just trying to get everyone a job in America, making shoes. Now, he’s talking more about relocating all manufacturing to the United States,” he said.
One company that Trump has singled out is Apple. He demanded that Apple and Samsung make their phones in the US or face hefty tariffs.
“Let’s think of the iPhone 14. It’s assembled in China, so you would say it’s manufactured in China. Effectively, all these iPhones are being manufactured in China, but China only produces, of the iPhone 14, about 4% of the value of the phone. Then South Korea manufactures 25% of the components in there, Japan 11%, Taiwan 7%, and the US is contributing about 32% of the value of that iPhone.
“Who’s making the money off selling the iPhone? That’s Apple... The massive profits come from the company that’s designing it, coming up with the idea, and also adding a lot of the highest value components and software to it. That is basically still an American product,” he said.
This week, the Trump Organisation announced plans for a self-branded, USD$499 gold phone. The company, run by Trump’s son Eric, advertised the “T1 Phone” as “proudly designed and built” in the US.
Fonseka said the danger for America lies in the sense that China is no longer the cheapest provider of labourers.
“It has a whole ecosystem of companies. No other country really has those small manufacturers who can then feed into the larger manufacturers and put together a product like that.
“Somebody from China, to illustrate a point, pulled out their lighter and said to me: ‘In China, all of the factories that make each component of this lighter are within two hours of each other’. Now, does that exist in someplace like New Zealand, or the United States? Not really,” he said.
Listen to the full episode to hear more about how global manufacturing chains work and what
The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. The podcast is presented by Chelsea Daniels, an Auckland-based journalist with a background in world news and crime/justice reporting who joined NZME in 2016.
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