Trade group crunches numbers on Trump’s impossible push for 100% US-made tech

Donald Trump's "Genesis Mission aims to increase domestic manufacturing in key technologies such as AI, advanced robotics, biotechnology, semiconductors, and nuclear technologies.

The mission is based on the idea that a self-sustaining supply chain within the US can maintain or gain an edge in these areas. However, neighboring countries and longtime allies are not exempt from manufacturing components for US products under Trump's vision.

Critics of Trump's plan have long argued that it is unrealistic, but now America's largest technology trade association has attempted to estimate the costs involved. According to the Consumer Technology Association (CTA), businesses and consumers need to know what it would cost to implement Trump's reshoring goals.

The CTA has acknowledged that simply stating that reshoring is difficult is no longer sufficient. Instead, practical questions about the costs and physical requirements of implementing Trump's plan need to be addressed.

To this end, the CTA has shared research with its members estimating the costs involved in achieving full US production of 10 categories of products commonly found in US homes by 2031.

These estimates suggest that reaching full US production would require significant investment, including between $185 and $230 billion in capital expenditure and the creation of hundreds of thousands of new jobs.

The costs associated with reshoring all supply chains at once are substantial, but labor demand may pose an even greater challenge. The CTA estimates that it would require more than double the existing US computer and electronics manufacturing workforce to meet this goal.

Reshoring production of a wide range of products, including computer monitors, laptops, robotic vacuums, smart speakers, smartphones, smartwatches, televisions, video game consoles, wireless earbuds, and wireless headphones, would put significant pressure on the energy grid. This is particularly concerning given the growing demand for power from AI data centers.

Smartphones are identified as a major bottleneck in the reshoring process, with production costs rising by 152 percent if all components were manufactured domestically. The CTA notes that this increase would inevitably be passed on to consumers, who already consider smartphones essential items.

The largest cost increases would occur in products featuring advanced technologies such as processors, memory, and high-definition displays. Laptops would become significantly more expensive, with production costs rising by 93 percent, while smartwatches would see a 97 percent increase.

However, the CTA's research suggests that companies may not immediately pass all of these extra costs on to consumers. Instead, they could absorb some of the increases or split them between themselves and their customers. This would still result in higher prices for consumers but might mitigate the impact on their wallets.

The weighted average price increase across the 10 products studied by the CTA is estimated to be between 27 and 55 percent. For low-income households, this could have a significant impact as they struggle to afford essential devices that are already wearing out.

The costs associated with reshoring manufacturing to the US are significant, according to a recent report by the Consumer Technology Association (CTA). For households replacing multiple devices at once, this increase in cost could be substantial, potentially leading to delayed technology purchases.

Households already facing budget constraints are likely to put off buying new technology until prices drop. The reluctance to go without essential items like smartphones is understandable, but it's a reality that many people face when trying to balance their budgets. This hesitation can further reduce sales for tech companies, which could be detrimental to their bottom line.

As the CTA pointed out, investors may become wary if returns on investment continue to decline due to reduced sales. This apprehension could make it even more challenging for businesses to invest in reshoring supply chains, despite government efforts to encourage domestic manufacturing.

The CTA suggests that a more practical approach would be to focus on reshoring the assembly part of manufacturing rather than every component. This partial reshoring is estimated to save companies between $16 billion and $19 billion in costs.

By focusing solely on assembly, the cost impact for businesses would be less severe compared to full-scale reshoring. The CTA estimates that smartphone prices could still rise by 67 percent, while laptops might see a 50 percent increase in manufacturing costs.

This partial approach allows companies to maintain their relationships with trusted suppliers and partners while they work towards bringing their entire supply chain back to the US.

The trade group behind a push for more US-based tech manufacturing has proposed a compromise on tariffs and assembly costs.

This partial approach would allow companies to maintain their relationships with trusted suppliers and partners while they work towards bringing their entire supply chain back to the US. The CTA suggests that Trump consider eliminating tariffs on components from trusted trade partners and allies, which could further reduce costs for businesses without increasing reliance on foreign markets.

Component tariffs drive up assembly costs relative to the current import mix, making it more expensive for companies to manufacture in the US. This is particularly true for products that matter most to consumers, such as electronics and other high-tech goods.

Ideally, once assembly is brought into the US, businesses can then evaluate which products they can afford to fully manufacture domestically, including components and all. However, this approach may not align with Trump's demands for rapid reshoring of key industries like semiconductor manufacturing.

Trump has been critical of foreign-made electronics and has called for a significant increase in domestic production. He has even demanded that the US move quickly to reshore 50 percent of semiconductor manufacturing by the end of his term. However, industry insiders say this goal is unrealistic.

The CTA's executive chair, Gary Shapiro, confirmed on a press call that it is physically impossible" and "labor-wise impossible to meet Trump's deadline for reshoring semiconductor manufacturing. Even with significant investment, Shapiro said, the task would be unachievable within two years.

The threat of tariffs has been a looming concern for US tech companies, including Apple, which has faced scrutiny over its pricing strategy since President Trump's announcement last spring. Analysts had forecasted that an average US-made iPhone could cost anywhere from $1,500 to $3,500, a price hike that might deter customers and impact the company's market share.

The prospect of such a significant increase in costs has led some experts to question whether Apple can meet global demand for iPhones manufactured in the US. A former Apple manufacturing engineer, Matthew Moore, expressed doubts about the feasibility of hiring enough US workers to produce iPhones at scale.

Apple's response to the tariffs threat was to gift President Trump a statue with a 24-karat gold base bearing the inscription Made in America. However, this gesture did not address the core issue of production costs and the potential impact on consumer prices.

The company's recent decision to introduce a $2,000 starting price tier for the foldable iPhone Duo has sparked further debate. Critics have suggested that Apple may be anticipating higher cost margins due to its investments in reshoring supply chains for other products.

Industry experts have noted that the current market conditions, marked by an industry-wide memory crisis, are driving up prices across the board. PC Mag defended the iPhone Duo price, arguing that it is not unusually high considering the device's innovative features and the current economic climate.

The pricing strategy employed by Apple has been met with skepticism, with some analysts wondering if the company is testing how much customers will pay for the absolute best iPhone money can buy".

Small businesses that make up 80 percent of the Consumer Technology Association's membership are facing significant challenges due to tariffs imposed on imported components for US-made technology products.

These companies contribute billions to the US economy and increasing their costs could have a ripple effect on inflation, which is already above target and rising. The CTA warns that policy makers should not treat consumer technology as a single entity when making decisions about reshoring production.

The association argues that imposing tariffs on essential categories such as smartphones and laptops would be particularly detrimental due to the high cost of domestic production in these areas.