Revealed by Donald Trump, Apple’s new announcement signals an expansion of its technology operations in the US. This move is a sound political strategy, as Trump’s campaign is focused on defending the country’s industry — even though some of Apple’s manufacturing isn’t in the US — and uses the brand as leverage over major companies.
$100 billion announcement after meeting with Trump
President Donald Trump announced on Wednesday that Apple AAPL.O will invest an additional $100 billion in the United States, a move that will expand the company’s domestic investment commitment and could help it sidestep potential tariffs on iPhones. The new pledge brings Apple’s total investment commitment in the U.S. to $600 billion. Earlier this year, the company announced it would invest $500 billion and hire 20,000 workers across the country over the next four years.
The announcement centers on expanding Apple’s supply chain and advanced manufacturing footprint in the U.S., but still falls short of Trump’s demand that Apple begin making iPhones domestically. “Companies like Apple, they’re coming home. They’re all coming home,” Trump told reporters in the Oval Office, moments after Apple CEO Tim Cook gave him a U.S.-made souvenir with a 24-karat gold base. “This is a significant step toward the ultimate goal of ensuring that iPhones sold in America also are made in America,” Trump added.
Asked if Apple could eventually build entire iPhones in the U.S., Cook noted that many components such as semiconductors, glass, and Face ID modules are already made domestically, but said that final assembly will remain overseas “for a while.” While the investment pledge is significant, analysts say the numbers align with Apple’s typical spending patterns and echo commitments made during both the Biden administration and Trump’s previous term.
Apple focuses on the supply chain in the US.
Due to tariff conflicts between the US and China, Trump is pressuring Apple to produce 100% of its iPhones in the US as part of his strategy. With a 25% tariff threat on products manufactured outside the country, Apple is forced to restructure its production chain, which currently still relies heavily on Asian suppliers.
In May, Trump had threatened Apple with a 25% tariff on products manufactured overseas, a sharp reversal from earlier policy when his administration had exempted smartphones, computers, and other electronics from rounds of tariffs on Chinese imports. Trump’s effort to reshape global trade through tariffs cost Apple $800 million in the June quarter. This investment can be a good way to circumvent tariff risks without having to make profound changes.
Apple has a history of promising production in the US.
Apple has a mixed track record when it comes to following through on investment promises. In 2019, for instance, Cook toured a Texas factory with Trump that was promoted as a new manufacturing site. But the facility had been producing Apple computers since 2013, and Apple has since moved that production to Thailand. Apple continues to manufacture most of its products, including iPhones and iPads, in Asia, primarily in China, although it has shifted some production to Vietnam, Thailand, and India in recent years.
The new announcement still raises eyebrows, given Apple’s history of broken promises. The company still prioritizes the Asian market for logistical and economic reasons, as evidenced by the transfer of production from Texas to Thailand. While significant financially, this step still doesn’t guarantee a structural change in operations.
Logistical and economic limits
Apple’s $100 billion investment may have symbolic value for Trump’s campaign and even generate positive impacts on the American economy, but it still doesn’t represent a revolution for the brand. The company’s global supply chain is complex, and factors such as logistics and costs still make it unlikely that the assembly line will be entirely made in the USA.
GCN.com/Reuters