(upbeat music)
- [Narrator] Which one
of these Apple gadgets
is the odd one out?
Did you get it?
The answer is this 2013 Mac Pro.
Not because it looks like a trashcan
but because it's the only one
that was assembled in the USA.
The others were assembled in China.
Why is that important?
- Apple makes their product in China.
I told Tim Cook, who's a friend
of mine, who I liked a lot,
"Make your product in the United States.
"Build those big beautiful plants
"that go on for miles, it seems."
- [Narrator] President Trump,
who is currently in the midst
of a trade war with China,
wants these Apple products
to be more like this one.
Actually, he wants them to
be fully made in the USA.
But Apple, one of the companies
most exposed to the trade war,
has one of the largest,
most deeply-integrated
global supply chains.
So could Apple ever move
production back to the US?
- We've taxed China on $300 billion
worth of goods and products
being sold into our country.
- [Narrator] Trump's threat
of imposing fresh tariffs
could drive the cost of Apple's
iPhone XS up by about $40.
Fortunately for Apple, that
tariff has been postponed
until December 15th,
and an earlier round of tariffs
on circuit boards and computer chips
has had minimal impact on the company.
As China and the US keep
fighting over trade,
Apple is already moving
some of its production
to avoid tariffs and trade duties,
like to India, for example,
where many of Apple's major
suppliers are relocating.
That's no mean feat.
The company moved production
out of US years ago,
building a global supply network.
It lists suppliers in over 25 countries,
with some parts made in
China since the early 2000s.
- [Tim] The way that I view this is
the vast majority of our products
are kind of made everywhere.
Largely I think that will carry the day
in the future as well.
- [Narrator] Others before Trump
have tried to get Apple to
bring jobs back to America.
President Obama reportedly
asked Steve Jobs
what it would take to
make iPhones in the US,
to which Jobs said, "Those
jobs aren't coming back."
- Will there be an Apple product
ever made again in the United States?
- I want there to be.
- So will there ever say on
the back of an Apple product,
"Designed in California,
assembled in the United States"?
- It may.
- [Narrator] The company has tried before.
Remember that Mac Pro?
- It is designed by brilliant
engineers in California
and assembled here in the USA.
(audience cheers)
- [Narrator] A series of debts
at its main supplier's factory
raised questions over
working conditions in Asia,
so the company invested $100 million
to assemble the Mac Pro in Austin, Texas.
- The reason the Mac
Pro was made in the US,
that's because it's a
pretty low-risk product.
It's not making a ton of these.
So it could move it here, test,
and see if it could do US manufacturing.
And if so, then it could
explore the opportunity
for other products.
- [Narrator] But the
plan in Austin had issues
when it came to locally
sourcing enough components
for the production of the
Mac Pro, leading to delays.
So what did the company do?
They imported some of
the parts from China,
where manufacturers had capacity
to keep up with demands.
- How many tool and die makers
do you know in the US now?
I could call a meeting around
the United States and say,
"Will every tool and die maker
come to this room tonight?"
and we wouldn't fill the room.
In China, you would need several cities.
- [Narrator] Recently,
production in the Austin plant
has fizzled out.
And production of the new Mac Pro--
- This is the new Mac Pro.
- [Narrator] Has been
relocated back to China,
according to people
familiar with the plans.
- With the new Mac Pro,
it's not hard at all
to shift production back to China.
This is Apple's playbook, right?
They perfected the art of
making things in China.
So transitioning the Mac Pro
or any other product to China
makes a lot of sense for them.
- [Narrator] So what are Apple's choices
if they want to navigate the tariffs?
They have three options.
Given how expensive and
complex moving out is,
Apple may just decide to stay in China
and at some point potentially pay tariffs,
which would likely make Apple
products more expensive.
Or Apple could move
manufacturing, just not to the US.
India and Vietnam are
only two of the countries
that are hoping to lure
Apple and its suppliers.
Finally, the company could
strike an agreement with Trump.
- Tim was talking to me about tariffs.
And one of the things
that he made a good case
is that Samsung is their
number one competitor
and Samsung is not paying tariffs
because they're based in South Korea.
It's tough for Apple to pay
tariffs if they're competing.
And I thought he made a
very compelling argument,
so I'm thinking about it.
- [Narrator] In July, Cook
said tariff exclusions
are key for Apple to make
the new Mac Pro in America.
- [Tim] That's what's
behind the exclusions.
So we're explaining that and
hope for a positive outcome.
- [Narrator] We contacted Apple
following the latest round of tariffs,
but the company declined
to comment further.
Apple hasn't recently moved
any of its manufacturing
back to the US,
but it says it spent $60 billion
with 9,000 US suppliers
and companies last year,
supporting 450,000 jobs.
They're even building a new
campus in Austin, Texas,
the same city where that Mac Pro
is no longer being assembled.
