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True Cost of a Trump iPhone

By Quigley   2016 Jan 9, 11:13am   2 links   3,221 views   13 comments   watch (0)   quote      

So Trump has been making news again with his proposal that we slap a 45% tariff on goods made in China. Immediate blowback mentioned how consumers would pay much higher prices and this would tank the economy. iPhones were mentioned as a product that's made in China, so let's take them as an example.
An iPhone of the newest sort costs about $700. Around $200 of that is materials, labor, shipping, and another 100 for development and stateside labor and advertising costs, leaving $400 in sheer profit. Trump taxes the total price with a tariff at 45%, for an end cost of $700+$415= $1115. So high! The sky will indeed fall and bury us poor consumers!
But let's look at corporate response... They know $1100 is too much sticker shock for the consumer. They've already calculated the price the market will bear ($700) and they're over. So they drop the price to $450, which after tariff is $685, a total price cut for the phone! Consumers continue to buy and business goes on as usual with one exception: the wealthy elites with the apple preferred stock don't make as much in returns.
This is a real problem for them so expect heavy resistance!
However, liberals should be for it once they realize that the budget deficit could be completely closed by this measure. The hope is that jobs would return to the USA.
I can't say that this would be good for my own job, since I have positioned myself to benefit from the trade with China, but I do think it would benefit the nation.

Comments 1-13 of 13     Last »

1   TwoScoopsMcGee   2016 Jan 9, 11:20am     ↑ like (3)   ↓ dislike (1)   quote    

That, and more and more assembly and part sourcing will be done in the US whenever it is feasible to reduce the total tariff on the product, creating jobs.

It's more important to have manufacturing jobs that pay $15/hr than warehouse for imported goods jobs that pay $9/hr no benefits. The extra $6/hr somebody gets every hour their work is much better for them than having to pay $1100 for an iPhone they only buy every few years.

To put it in reverse, what free traders are saying is "It's better to have people making $10/hr in a warehouse than making $15/hr in a factory, because saving a few hundred bucks on something you only buy once every few years is a better deal than making an extra $5/hr (!?!?!?!) each and every hour you work, which is $200 per week, $800 per month, $9600 extra dollars per year."

2   Quigley   2016 Jan 9, 11:23am     ↑ like (3)   ↓ dislike (1)   quote    

thunderlips11 says

what free traders are saying is "It's better to have people making $10/hr in a warehouse than making $15/hr in a factory

It's definitely better for the free trader owners! They can hoard much more profit with the free trade model. That hoarded wealth doesn't do anyone else any good, and the policies necessary to create it hurt workers, families, and the nation as a whole.

3   lostand confused   2016 Jan 9, 12:01pm     ↑ like (2)   ↓ dislike   quote    

Meanwhile Obozo negotiated the TPP-the largest free trade deal in US history-in secret. Even congress critters were threatened with jail if they dared to reveal what is in it to their constituents. Obozo is a dem-isn't he supposed to be for the common man??

4   Booger   2016 Jan 9, 1:13pm     ↑ like (5)   ↓ dislike   quote    

Prices often didn't go down when they moved the factory to China. Mexico, etc. , so it is reasonable to assume that the won't always cost more when it's made in USA

5   mell   2016 Jan 9, 3:10pm     ↑ like (8)   ↓ dislike   quote    

Nobody needs an iphone. Any cheap web phone will do, buy a Moto G for $100. I find it hard to believe that people are willing to pay even $700. In fact tech is not what's breaking the consumers back (but it's a useful tool to bring the CPI down), it's all the inflation in housing, healthcare and education.

6   Booger   2016 Jan 9, 3:35pm     ↑ like (4)   ↓ dislike   quote    

For what Apple charges for their stuff, they can afford to make it in USA.

7   Bellingham Bill   2016 Jan 9, 4:03pm     ↑ like   ↓ dislike (2)   quote    

Booger says

For what Apple charges for their stuff, they can afford to make it in USA.

yup, problem is Shenzhen is such a center of mfg excellence.

Apple can afford to pay a million people at hourly rate that is the daily wage in Shenzhen, but can they find a million people here that can do the work?

This ship sailed decades ago, really. Back in the Stone Age of consumer electronics -- 1980 -- mfg was relocating to SE Asia, where final assembly might or might not happen stateside.

8   Quigley   2016 Jan 9, 5:21pm     ↑ like (1)   ↓ dislike (1)   quote    

Time for the corporations that benefit to pay more taxes. That's really what it's about. I highly doubt that quality merchandise would rise significantly in price. And who cares if it does? When people have more money to spend, they do so. As mell said, it's not the cost of widgets that's breaking our consumer economy, it's the cost of housing, food, living, utilities, and especially Obamacare. That plus more people than ever working minimum wage jobs..,

9   Booger   2016 Jan 9, 6:18pm     ↑ like (3)   ↓ dislike   quote    

Bellingham Bill says

This ship sailed decades ago, really. Back in the Stone Age of consumer electronics -- 1980 -- mfg was relocating to SE Asia, w

If it can move there, it can move back.

10   Tenpoundbass   2016 Jan 9, 6:24pm     ↑ like (1)   ↓ dislike   quote    

You say that like an American made iPhone is a bad thing!

11   Tenpoundbass   2016 Jan 9, 6:25pm     ↑ like (2)   ↓ dislike   quote    

Booger says

If it can move there, it can move back.

Of course it can! The age of the lost hope defeatists are over.

12   TwoScoopsMcGee   2016 Jan 9, 6:37pm     ↑ like (3)   ↓ dislike   quote    

Many Chinese factories are exceedingly primitive not only because of the abundance of cheap labor, but the much higher cost of electricity in China. A few cents per KW/hr is a big deal when you're producing on a massive scale. Many electronic parts, say handheld radios, are literally assembled by pretty much slaves hunched over with a cheap soldering iron, when the same device was assembled for decades in the US and Japan using automated machines and only a human around to make sure everything was aligned correctly. So we could bring those jobs back with automated factories, leverage our far cheaper energy costs, maybe employing 100,000 people instead of a million.

You'd be shocked at how many Chinese factories/subcontractors are using old Tulas (Soviet Singers, red colored of course and foot pedal powered) to sew clothes together. Yes, much of what you brought at Target or where-ever was probably finished on Soviet HOUSEHOLD Sewing machine in China. Advantage: Foot Pedal Powered. Disadvantage: Major repetitive stress injury.

Making Android devices. Notice Soldering Iron staying warm in the box. Notice parts being attached by hand.

I found this in 5 seconds "China Factory Electronics" plenty of pics of Chinese workers screwing in tiny screws by hand, inserting parts by hand, etc. Doing shit that was already automated or semi-automated in Japanese or US Electronics factories back in the 70s.

13   Tenpoundbass   2016 Jan 10, 1:54pm     ↑ like (2)   ↓ dislike   quote    

I wonder how many Tax dollars have been spent on propaganda over the last 30 years telling the American worker...

1)The jobs are leaving but you'll get better ones.
2)Sorry those better jobs also came with HB1 Visa better employees
3)Jobs aren't comming back
4)Asians are smarter than us, and more technical.
5)It would take us 10 years just to gear up to replace manufacturing from overseas back to the states
6)The global economy depends on the status quoa
7)$10 gas would benefit everyone.

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