Archive | March 2025

What the iPhone Can Teach Politicians About Trade

I increasingly wish that politicians would acquire basic knowledge of supply chains. In their insightful article The Guts of an Apple iPhone Show Exactly What Trump Gets Wrong About Trade, Dedrick, Linden, and Kraemer critique common misconceptions surrounding reshoring, using the iPhone to illustrate complexities in global supply chains. Amidst debates intensified by Trump’s tariffs on imports, the authors emphasize that China actually contributes minimal value – less than $10 per phone – to the manufacturing of an iPhone, despite high assembly costs appearing on trade deficits. Most significant value comes from the U.S., Japan, Taiwan, and South Korea, reflecting a supply chain where assembly location does not equate to economic dominance. The authors demonstrate that reshoring manufacturing, particularly for products like iPhones, would neither boost the U.S. economy nor restore high-value jobs. Political decision-makers should recognize global supply chains’ complexity. What we need are informed decisions that appreciate how value is created in today’s interconnected global economy – not simplistic trade policies.