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Where Donald Trump Goes Wrong On Apple: They Already Manufacture In America

March 2, 2016

By Tim Worstall

One of the standard parts of Donald Trump’s allure is his insistence that he’ll make sure that Apple AAPL -0.22% manufactures their computers in the US again. What he’s really referring to of course is the iPad and iPhone: the Macs are a relatively trivial part of the business these days (and some of those are indeed assembled in the US). However, the problem with this insistence is not that it’s just grossly illiberal (not something to worry him perhaps), not actually within the President’s power, but that in any realistic economic sense Apple’s various products are manufactured in the US.

It’s entirely true that they’re not assembled in the US: that does take place in those vast barn-like structures in China. But assembly and manufacturing are, to the economist, rather different things.

Here’s just one report of what The Donald has been saying:

Politicians of both parties are prone to making economically illiterate promises and claims during campaign seasons. Donald Trump is turning this illiteracy into an art form. One of his latest insane promises is to force Apple Inc. to manufacture in the United States.

In a recent speech at Liberty University, Trump boasted, “We’re going to get Apple to build their damn computers in this country instead of other countries.” In these few words, Trump gets trade economics wrong and shows his ignorance of modern manufacturing.

First, let’s talk costs and benefits. The benefit of an iPad or any other Apple computing device is the satisfaction it gives its user. Those benefits accrue to U.S. consumers, whether Apple manufactures their computers in China or in the United States.

All of that is entirely true: as I never tire of saying we must always look at economics from the point of view of consumption, of the consumer. What is the value that Apple provides in that economic sense? That we get to use iPhones and iPads. Where they’re made, how much tax is paid on profits, all of these things are second and third order even points.

Read the full article at Forbes.com: Where Donald Trump Goes Wrong On Apple: They Already Manufacture In America

Issue Categories : Donald Trump, Trade