Republican Vice Presidental candidate JD Vance today
accused Apple of using “slave labor” while being interviewed during CNBC’s Squawk Box program. While discussing the possibility of the U.S. imposing taxes on companies that rely on China to manufacture their products, Vance said, “Do I think
Apple is an evil company? No. Do I think that sometimes they benefit from Chinese slave labor? Yeah, and that’s pretty sick. I think that a company that wants to benefit from American markets should also have to pay American workers a fair wage.”
Apple has used Chinese manufacturing facilities to produce many of its products and has said that it has never found any evidence of forced or “slave” labor in the factories that produce its devices. While Chinese facilities owned by Taiwan’s Foxconn assemble the majority of iPhone units produced in the country,
Apple has started to build more handsets in India. Last fiscal year, $14 billion worth of iPhone handsets were built in India. Vietnam is another country that is close to Apple’s current supply chain. As a result, Apple currently does build some products in that country and could expand that figure.
Vance also talked about raising tariffs on companies “shipping jobs overseas.” We have to tip our hat to Vance who seems to understand what a tariff is. What a tariff is NOT is a magical money-raising scheme that forces China to pay millions of dollars to the U.S. Treasury. A tariff is simply an import tax. When the U.S. imposes a tariff on Chinese imports, China pays nothing. U.S. companies and consumers end up paying the import tax. It is mostly the U.S. companies that pay this and if they want, they can raise their prices to U.S. consumers who end up paying the higher prices imposed by the tariff.
The iPhone escaped getting hit with a tariff or U.S. import tax during the peak of the trade war with China a few years ago. But if the U.S. decides to increase tariffs on imports from China in the mistaken belief that it will hurt China and help the U.S., American consumers should expect to pay more for devices built in China and shipped to the states such as the iPhone, for example. According to CNBC, President Trump is threatening to hike tariffs on China by an additional 60% to 100% during a second Trump term.
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