The massive tariffs being levied on Chinese goods puts Apple—one of America’s most valuable and iconic companies—at serious risk. Nearly 90% of its products are made in China in high-tech factories that span hundreds of buildings and took decades to build, equip, and staff. With the imposition of steep tariffs, the cost of Apple’s products could double. That’s not just unsustainable—it’s existential.
Tim Cook’s claim to fame has been his mastery of manufacturing and supply chain management. But he and Apple placed their bets entirely on China. That strategy now looks to be near fatal. The tariffs threaten to unravel the model that allowed Apple to dominate the global tech market.
What’s the solution? According to some in the current administration, the answer is simple: “Just build it in America.” That suggestion isn’t just naïve—it’s economically and logistically absurd, and just plain stupid.*
*The actual quote from Trump’s tariff point person Howard Lutnick is: “Reshoring efforts would result in an “army of millions and millions of human beings screwing in little screws to make iPhones” coming to the country.”
How Did We Get Here?
In 2015 I visited one of the many Apple-Foxconn campuses in China and was flabbergasted at what had transpired since I developed Apple’s first notebook computer in China 17 years earlier. The scale was staggering—like a small city devoted entirely to manufacturing. Dormitories for workers, shopping centers, parks, movie theaters, gyms, bus service—an entire ecosystem had been built around Apple’s production needs. Foxconn recruited hundreds of thousands of workers, many from rural areas, and created a self-contained community to support them.
Why China? Cost, yes—but also scale, speed, and proximity. Apple wasn’t just chasing cheap labor. They were following a long-established model: build products close to where their components are made. And in cities like Shenzhen and Shanghai, you’ll find an unrivaled concentration of component manufacturers—circuit boards, displays, batteries, moldings—many within an hour’s drive of one another. These suppliers compete fiercely, driving down prices and driving up innovation. That’s not something you can recreate in Texas or Ohio with a few subsidies and patriotic ambition.
During my career, I worked with dozens of electronics factories across China, Taiwan, and Japan. The idea that this was all “slave labor” is a lazy trope. What I saw was advanced engineering, sophisticated logistics, and manufacturing precision that rivaled anything in the West. It made sense for Apple—and nearly every other tech company—to locate production where the entire ecosystem existed.
But Apple was not the first big computer company to go to China- more like the last one. I saw what their competitors had been doing for years in Asia, and I convinced Apple to follow their lead.
The First Apple Notebook Built in China
I was at Apple in the late 90’s, about a decade before the iPhone, during a time when Apple was struggling to compete with PCs. Apple’s notebook computers were more expensive, less feature-rich, and tool longer to develop. We had about 3% market share.
Meanwhile, companies like Dell, HP, Compaq, Toshiba, Sony, and Compaq were producing laptops in modern Taiwanese-run factories in both Taiwan and China. Many of these notebooks, despite the brand labels, were coming off the same lines. The factories were massive, efficient, and staffed by talented engineers who knew how to both design and get a product into production quickly.
I convinced my boss to let me take a new Apple notebook concept to one of these companies for the very first time. My job was to design and build a new generation consumer notebook computer, and I wanted to take the path that offered the best chance of success.
We partnered with Quanta, one of the leading notebook manufacturers. At our first meeting, I brought a team of Apple engineers—specialists in displays, keyboards, batteries—to meet with their Quanta counterparts. Confident of their own expertise, they expected to drive the product specs and engineering. But within minutes, they were speechless and humbled.
The Quanta engineers introduced them to components that were more advanced, cheaper, and better-performing than anything we had access to in Cupertino. Long-life batteries we didn’t know existed. A new generation of displays ready for mass production. Keyboards that cost a quarter of what we were paying—with identical feel and reliability.
Taiwan and Cupertino were a world apart, not only by distance but by product knowledge and expertise. Taiwan and Chinese companies were inventing new displays, batteries and other components for use by the notebook factories nearby, completely oblivious to Apple.
That first Apple notebook—the first product manufactured in China—went from concept to market in ten months – a record for an Apple product. It featured interchangeable drives and batteries, finally putting us on par with PC competitors. And we didn’t need to reinvent every part—we leveraged components that were already being produced at scale.
Two years later every Apple notebook was being made in either Taiwan or China, alongside nearly every other notebook computer in the world.
To think we can now replicate this entire industrial ecosystem in the U.S. is pure fantasy. You can’t just sprinkle factories across the Midwest and expect innovation and efficiency to follow. The U.S. lacks not only the scale, but also the supply chain depth, workforce specialization, and logistical infrastructure that’s been built up in China over four decades.
What can Apple do now?
Tim Cook managed to delay the last round of tariffs by courting President Trump, securing exemptions and buying time. But the landscape has changed. The second Trump administration is under pressure to act tough on China, and the political winds have shifted. But they are totally clueless about manufacturing high tech electronics.
Will Cook be able to carve out another exception for Apple? Will he be able to explain these basic facts to this administration? And will they even care?
And what might China do in response if Apple is seen as a bargaining chip? Beijing could retaliate by targeting Apple’s operations, suppliers, or even its domestic sales in China. Apple is caught between two very stubborn men involved in a huge trade war.
There’s no easy way out with the huge tariffs now in place. If Apple doesn’t get an exemption, you could say it’s cooked.
