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Since becoming the President of America, Donald Trump’s tongue has only one slogan- which make, make it in America. Trump is adopting tariff tactics to fulfill this dream. To increase the price of the goods that are being manufactured outside America, they are putting tariffs to increase the price. Trump’s target is now the iPhone maker Apple. Apple is creating iPhone in India after China and in the meantime Trump threatened that if Apple decides to create an iPhone in India, he will put 25 percent tariff on the iPhone. But the interesting thing has come to light that even if 25 percent tariff is imposed on the iPhone made in India, its price will be much less than the price of iPhone made in America. This has revealed this from a report of Global Trade Research Initiative (GTRI).
Despite the tariff, India is a profitable deal
According to the report, the price of an iPhone in the US is US $ 1,000 and includes more than a dozen countries in making it. Apple keeps almost every iPhone $ 450 with its brand, software and design through its brand, software and design.
American components like Qualcomm and Broadcom have spent $ 80. Taiwan contributes US $ 150 by creating a chip. South Korea adds to US $ 90 through OLED screen and memory chips. Japan supplies an US $ 85 -dollar components, mainly from there to the camera system. Germany, Vietnam and Malaysia contributes US $ 45 through small parts.
Understand mathematics
The main reason for this is the huge difference in labor costs between India and America. In India, mobile assembled employees earn around US $ 230 per month, while in American states such as California, labor costs can increase by about $ 2,900 per month due to minimum wage laws. That means 13 times more than India
Now understand simple maths. It costs around US $ 30 to assemble an iPhone in India, while the cost of the same process in the US will be around 390 US dollars. Apart from this, Apple gets the benefit of product-linked incentive (PLI) from the government on creating an iPhone in India.
If Apple transferred his factory to the US by obeying Trump, then due to the increased labor cost, its profit on every iPhone can decrease from US $ 450 to only 60 US dollars. If the company wants to save its earlier profit, then it will have to increase the price of the phone very high (at least $ 360 per piece). On the other hand, even if the tariff of 25 percent of Trump is imposed on making the iPhone in India, then the price per piece will increase by $ 250.
ALSO READ: All smartphones made abroad will also include tariffs, Apple will also be included: Donald Trump’s big announcement
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