Apple’s Reliance on China Is About Far More Than Labor Costs

Last week, in a Truth Social post, US President Donald Trump threatened to slap 25% tariffs on iPhones until Apple starts manufacturing them in the US. Given Trump’s track record on announcing and rescinding new tariffs, it’s very possible that nothing will come of this. But the fascinating new book Apple in China (Scribner, May 13), by the Financial Times reporter Patrick McGee, explains why the company isn’t going to start making large numbers of phones in the US, regardless of where the president’s policies ultimately land.

A major part of China’s initial advantage as a manufacturer was low wages, but McGee convincingly argues that Apple’s reliance on China is about far more than labor costs. The giant device-maker’s unique approach to overseas manufacturing, developed at first out of desperation, has evolved into a formidable competitive advantage. It is just as responsible for Apple’s success as the vision of Steve Jobs or the aesthetic gifts of Jony Ive, according to McGee. And it’s not just Apple that benefited: McGee argues that the company’s billions in investment and freely shared knowledge have been a major factor enabling the rise of China’s own technology companies, allowing them to close the gap with Western competitors — Apple included — with surprising speed.