Report to Trump: In fact, no one expects American manufacturing

Trump, who is unwilling to be lonely, recently announced a series of chip-related taxes. He originally called for a 100% heavy tax on chip courses made by non-US locally. Before the author's deadline, he further called for a 200% or even 300% tax on imported chip courses. This is not surprising. It is to force chip manufacturers such as NTU or Samsung to build chip manufacturers in the United States. Another goal is to find ways to make consumer electronics based on chips also manufacture in the United States, and to address Trump's U.S. policy.

But the fact is that no one expects consumer electronics to be produced locally in the United States, especially American consumers, because if they want to move consumer electronic production to the United States in a short period of time, it will not only cause product prices to rise, but more importantly, the quality and supply of the product will face serious challenges.

First is the rise in product prices. Although chips produced in the United States enjoy zero-related taxes, taking PCs as an example, if all key components including mechanisms, electronics, memory, storage devices and screens are to be produced in the United States, the stacking of costs behind them will be quite visible. The cost of flying comes from the increase in cost of construction factories in the United States and the significant increase in labor costs. The final result is that even if the production of the whole machine in the United States can save additional taxes, the increase in the cost of parts behind it will still lead to the sudden increase in the end of the product, making the sales price of consumer electronic products in the United States unattainable.

In addition to the rapid growth of product prices, the quality and supply of products will also face serious challenges. First of all, the United States has been deprived of consumer electronics for a long time. However, China and other Southeast Asian countries have long been familiar with the manufacturing of consumer electronics, including land acquisition, water and electricity supply, line establishment, human resources recruitment and quality control, so the cycle of PC industry's "first quarter release, second quarter sales, third and fourth quarter promotion" has been continued.

But if it is brought back to the United States for manufacturing, the supply will definitely be alerted first. Because the United States alone accounts for at least one-quarter of the world's consumer electronics shipments, and with such strong demand, the supply will be quite tight when production returns to the United States and the pain period is longer. The already high prices will be more expensive. In the end, the unlucky ones will be the consumers.

Not only that, in the process of production transfer to the United States, due to insufficient production experience and inability to obtain cheap and efficient labor, the quality of the product will inevitably face serious challenges. This will undoubtedly allow consumer electronic quality that has achieved a certain yield due to the highly globalized division of labor. The result is that consumers spend a lot of money to buy, except for the entire product that can be marked as Made In USA, there is no other worth talking about, because the quality may be far inferior to Made In Taiwan, Made In China or Made In. South East Asia.

I believe that consumer electronic brands in the United States are also aware of these consequences, so Apple actively cooperates with the US government to attempt to "increase investment in the United States" and "produce parts in the United States" to traverse the great risks that iPhone whole machines may bring in the US assembly. Finally, everyone takes it in mind, but what cannot be said is Trump's term of office. It takes time to establish a supply chain, but it is very likely that Trump's term of office will also come after the supply chain is established. In the uncertain situation, the general brand will naturally delay and wait for change. So I would like to advise President Trump: except you, no one is actually expecting manufacturing in the United States.

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