President Donald Trump's plan to move iPhone manufacturing to the United States faces many legal and economic challenges, according to experts, not least the issue of assembling 'small screws' that require precision manufacturing that may only be achieved through automation.
Trump threatened on Friday to impose a 25% tariff on all iPhones manufactured outside the United States, adding that these tariffs would also apply to Samsung and other smartphone manufacturers, explaining that these tariffs are expected to take effect by the end of June.
Trump said, 'It wouldn't be fair if tariffs weren't imposed on all imported smartphones,' adding, 'I had agreed with (Apple CEO) Tim (Cook) not to do that. He told me he would go to India to build factories, and I said there's no problem going to India, but you won't sell here without tariffs.'
For his part, U.S. Commerce Secretary Howard Loutnik told CBS last month that 'millions of people who are assembling small screws in iPhones' would see their jobs move to the United States, where they would be replaced by automated technologies, creating opportunities for skilled labor. However, he later clarified to CNBC that Tim Cook informed him that implementing this requires technologies that are currently unavailable in the United States.
Loutnik quoted Cook as saying, 'I need robotic arms, and I need to execute this work precisely and at scale, and when this technology is available, we will move production here.'
Experts believe that the fastest way the Trump administration can pressure Apple using tariffs is to resort to the same legal framework that was used to impose additional tariffs on a wide range of imports, which is based on the International Economic Emergency Powers Act (IEEPA), which grants the president broad powers to take economic action when declaring an 'unusual and extraordinary' threat to U.S. national security.
Sally Stewart Lining, a partner at the Washington law firm Akin Gump, said, 'There is no clear legal authority allowing specific tariffs on certain companies, but the Trump administration may try to incorporate that into emergency powers,' noting that other ways to impose tariffs on a specific company require long-term investigations.
However, according to her, imposing tariffs solely on Apple could 'give its competitors a competitive advantage, which contradicts Trump's goals of bringing manufacturing back to the U.S.'
Experts noted that Trump has long considered the IEEPA law a flexible and effective economic tool, especially since it is unclear whether the courts have the authority to review the president's decision regarding the declaration of emergency.
Tim Meyer, a professor of international law at Duke University, said, 'In the view of the administration, as long as the president is conducting the formal rituals to declare an emergency and describes it as unusual and extraordinary, there is nothing the courts can do.'
In a lawsuit filed by 12 U.S. states in the International Trade Court in Manhattan, the use of the IEEPA law to impose tariffs known as 'Liberation Day Tariffs' was challenged, and the court is evaluating whether the law actually permits such actions.
Meyer added that if the Trump administration wins the case, 'the president would have no difficulty inventing an emergency to justify imposing tariffs on iPhone imports'; he could simply include iPhones under the emergency related to the trade deficit, which has previously been used as a basis for imposing tariffs.
But moving manufacturing to within the United States could take a decade and could lead to the price of an iPhone rising to $3,500, according to Dan Ives, an analyst at Wedbush. Currently, the price of the most expensive iPhone model is about $1,200. Ives said, 'We believe the idea of Apple producing iPhones inside the U.S. is more like fairy tales, not realistic.'
Even before reaching this scenario, imposing tariffs on iPhones would raise costs for American consumers by complicating supply chains and increasing financing costs for Apple, according to Brett House, an economics professor at Columbia University. He said, 'None of this would be positive for the American consumer.'
