Source: Homa Appliances / Unsplash.com
The good news is, Apple is still making iPhones. The bad news? Apple’s still making iPhones in China. So, sure, President Trump briefly toyed with slapping a 125% tariff on everything made in China, but the iPhone was quietly spared. Why? Because neither China nor America really wants Apple to stop making iPhones, certainly not abruptly. It’s not just that your EUR 1.000 smartphone would jump to EUR 3,500, it’s that the smartphone wouldn’t get built at all. You can’t simply transplant hundreds of factories, millions of workers, and billions of parts to America overnight (or really, at all). Even Trump seems to realize this, grudgingly.
Because the truth is, Apple’s supply chain isn’t just about cost, it’s about capability. It’s about scale. It’s about being able to produce one million iPhones per day, each requiring 1,000 separate components. Tesla’s shiny factories in Texas might look impressive, but compared to Apple’s global production ballet, they’re essentially artisanal workshops. Apple’s sheer volume dwarfs anything Tesla or, frankly, any other manufacturer can achieve. So, relocating Apple’s entire supply chain? Good luck with that.
Even if you ignore the complexity (and please don’t), there’s the human side. Apple’s Chinese supply chain employs roughly three million people. Try moving even 20% of that workforce to the U.S., and suddenly you’re asking for special visas for about 600,000 Chinese workers. MAGA supporters might cheer tariffs, but importing half a million workers from China? Politically awkward, to say the least.
Then there’s China itself, which, not incidentally, has all the leverage. They’ve quietly signaled that if Apple tries too aggressively to leave, supplies might mysteriously slow, rules may tighten overnight, and electricity might suddenly become “intermittently available.” This is China’s gentle way of saying: “Apple, we love you, but don’t get any funny ideas.”
Yet, there’s irony here: Apple’s success in China has trained local firms like Huawei and Oppo, who now build phones as good as, or better than, the iPhone. It turns out that when you spend decades teaching a country how to manufacture your best stuff, eventually they become better than you at it. So, Apple’s stuck: the supply chain is too vast, too complex, and too politically fraught to easily shift.
And the kicker is that the Trump administration’s tariff whiplash creates exactly the uncertainty that makes supply chains miserable. Apple, a trillion-dollar symbol of American economic might, could see its valuation swing wildly, simply because nobody can predict what tariffs Trump might tweet tomorrow. Investors hate uncertainty even more than they hate tariffs.
So, where is the supply chain? It’s everywhere and nowhere you’d want it to be if you’re trying to simplify geopolitics. Apple built the most sophisticated, interconnected, efficient supply chain in history and now finds itself handcuffed by its own success. Great for efficiency, terrible for resilience. Or politics. Or stability. But hey, at least your next iPhone isn’t EUR 3,500. Not yet, anyway.
NB! This short essay started after reading the article “China and America Agree: Apple Is Too Big to Fail” – The Free Press
