“U.S. President Donald Trump often tweets from his iPhone about pressuring China to address its $375 billion trade surplus with the United States,” Adam Jourdan reports for Reuters. “But a closer look at the Apple smartphone reveals how the headline figure is distorted.”
“The big trade imbalance – at the heart of a potential trade war, with Trump expected to impose tariffs on Chinese imports this week – exists in large part because of electrical goods and tech, the biggest U.S. import item from China,” Jourdan reports. “Using a rough calculation, that implies the iPhone 7 series added $15.7 billion to the U.S. trade deficit with China last year, about 4.4 percent of the total. That’s also about 22 percent of the $70 billion in cell phones and household goods the U.S. imported from China. ‘With an iPhone, where China is just the final assembler, most of the value (contributed by China) is just the labor rather than the components themselves,’ said John Wu, an economic analyst with a U.S.-based think tank, the Information & Innovation Foundation.”
“For its part, Apple has responded to Trump’s concerns with a pledge to bring some suppliers to the United States. It said in January it planned to pay $55 billion to U.S. suppliers this year,” Jourdan reports. “Over the last decade, Apple shipped 373 million iPhones, worth $101 billion by manufacturing value, in the United States, according to researcher StrategyAnalytics. The iPhone’s contribution to U.S. trade deficits is almost certain to have grown sharply alongside higher retail prices and shipments.”
Read more in the full article here.
MacDailyNews Take: It’ll certainly be interesting to see how it all shakes out.
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