Will Trump's 'Made in US' gimmick drive up iPhone price?

Merely five months ago, when Tim Cook, CEO of Apple Inc. attempted to ask the company's Asian suppliers, including Foxconn Technology Group, the electronic manufacturer headquartered in China's Taiwan and Pagetron Corporation, to relocate their production lines to the United States, he encountered strong protests.

However, as the inauguration of Donald Trump's presidency is approaching, Foxconn has started to show signs of compromising and started to evaluate the feasibilities of moving its workshops to the United States.

But the question is: will the relocation truly help rejuvenate U.S. manufacturing without fueling costs and driving up prices, subsequently harming sales of U.S. iconic tech products such as the iPhone series.

Yet a report issued by Boston Consulting Group (BCG) last year shows a different picture. According to the report, the overall production cost of textile industries in China has been only 4 percent less than that of the United States. This indicates to the end of China's low-cost and labor-intensive economic competitiveness which the country relied on so much during the past few decades.

At the same time, electronic manufacturers in Guangdong admitted in an interview with the Beijing Youth Daily that industrial costs have surged at least 30 percent in the past few years. The rising costs may tip the balance of the pros and cons of Apple Inc's decision to change the location of its assembly lines.

However, according to the Beijing Youth Daily, Chinese manufacturers stay competitive by keeping their labor costs lower than the developed economies. For example, the average labor cost per person is around 5,000 yuan (US$725) a month in a Japanese invested home appliance manufacturing base in China. While, in Japan the cost may soar to 16,000 yuan, similar to the pay of their U.S. counterparts.

But there are still concerns over China's rising manufacturing costs in addition to the labor force, such as the natural resources, land, energy and raw materials. According to the BCG report, a product cost of US$1 in the United States will cost 96 cents when being manufactured in China.

Some industrial insiders agree that although the payment per unit time of China's labor force remains low, their low productive efficiency which is below the standard of developed economies, partly because of techniques and partly because of manufacturing facilities, may add costs to products.

However, despite labor costs, the commitment to bring back Apple Inc.'s production line to the United States still sounds impractical, at least in the next few years. The program to transfer the labor-intensive manufacturing industries into the developing world in the past few decades has resulted in a contraction of engineering graduates in the United States, where the number of people graduating from technological and engineering schools reached no more than 7,000 in 2014. Meanwhile, according to Cook, Apple Inc. is in need of 8,700 engineers to keep an eye on the 200,000 workers. However, in contrast, a single manufacturing base of Foxconn in Shenzhen, Guangdong Province, had a size of 240,000 employees, including both engineers and workers, when the factory was in its heyday.

Additionally, without Asian suppliers, which constitute more than 60 percent of Apple Inc.'s contracted manufacturers around the world, the costs of logistics and raw materials for the production of screens, chips and camera lenses will increase if the technology conglomerate relocates them to the United States, the Beijing Youth Daily reported.