There Are Two Chinas, and America Must Understand Both The technological success that has captured the attention of many in the United States is one aspect of the Chinese economy. There’s another, gloomy one. ....... The other China — gloomy China — tells a different story: sluggish consumer spending, rising unemployment, a chronic housing crisis and a business community bracing for the impact of the trade war. ....... China’s solutions come with a lot of pain ......... Just like the United States, China is a giant country full of disparities: coastal vs. inland, north vs. south, urban vs. rural, rich vs. poor, state-owned vs. private sector, Gen X vs. Gen Z.
The ruling Communist Party itself is full of contradictions. It avows socialism, but recoils from giving its citizens a strong social safety net.
.............. Despite the trade war, the Chinese tech entrepreneurs and investors I talked to over the past few weeks were more upbeat than any time in the past three years. Their hope started with DeepSeek’s breakthrough in January. Two venture capitalists told me that they planned to come out of a period of hibernation they started after Beijing’s crackdown on the tech sector in 2021. Both said they were looking to invest in Chinese A.I. applications and robotics. ............. But they are much less optimistic about the economy — the gloomy China. ........... they believed that China’s advances in tech would not be enough to pull the country out of its economic slump ........ Advanced manufacturing makes up about only 6 percent of China’s output, much smaller than real estate, which contributes about 17 percent of gross domestic product even after a sharp slowdown. .............. When I asked them whether China could beat the United States in the trade war, nobody said yes. But they all agreed that China’s pain threshold was much higher. ............. It’s not hard to understand the anxiety felt by Americans frustrated with their country’s struggles to build and manufacture. China has constructed more high-speed rail lines than the rest of the world, deployed more industrial robots per 10,000 manufacturing workers than any country except South Korea and Singapore and now leads globally in electric vehicles, solar panels, drones and several other advanced industries. ............ China’s top-down innovation model, heavily reliant on government subsidies and investment, has proved to be both inefficient and wasteful. Much like the overbuilding in the real estate sector that triggered a crisis and erased much of Chinese household wealth, excessive industrial capacity has deepened imbalances in the economy and raised questions about the model’s sustainability, particularly if broader conditions worsen. .......... In 2018, the country had nearly 500 E.V. makers. By 2024, about 70 remained. Among the casualties was Singulato Motors, a start-up that raised $2.3 billion from investors, including local governments in three provinces. Over eight years, the company failed to deliver a single car and filed for bankruptcy in 2023. ........... The Chinese government tolerates wasteful investment in its chosen initiatives, helping fuel overcapacity. But it is reluctant to make the kind of substantial investments in rural pensions and health insurance that would help lift consumption. ........ “Technological innovation alone cannot resolve China’s structural economic imbalances or cyclical deflationary pressures” ...... “recent advances in technology may reinforce policymakers’ confidence in the current path, increasing the risk of resource and capital misallocation.” ............ The Chinese leadership’s obsession with technological self-reliance and industrial capacity is not helping its biggest challenges: unemployment, weak consumption and a reliance on exports, not to mention the housing crisis. .......... Youth unemployment is 17 percent. The real numbers are believed to be much higher. This summer alone, China’s colleges will graduate more than 12 million new job seekers. ........... Trump was not wrong in saying factories are closing and people are losing their jobs in China. ......... In 2020 Li Keqiang, then the premier, said the foreign trade sector, directly or indirectly, accounted for the employment of 180 million Chinese. “A downturn in foreign trade will almost certainly hit the job market hard,” he said at the onset of the pandemic. Tariffs could be much more devastating. ........... In April, Chinese factories experienced the sharpest monthly slowdown in more than a year while shipments to the United States plunged 21 percent from a year earlier. .......... Mr. Chen lives in the gloomy China. He stopped taking the vaunted high-speed trains because they cost five times as much as a bus. Flying is often cheaper, too. ........ many local governments, even in the wealthiest cities, are deeply in debt. ............... Because he’s in his late 30s, Mr. Chen is considered too old for most jobs. He and his wife had given up on buying a home. Now with the trade war, he expects that the economy will weaken further and that his job prospects will be dimmer. ........ “I’ve become even more cautious with spending,” he said. “I weigh every penny.”
Prompt to ChatGPT Image Generator: Generate in the style of Artist Leonid Afremov. Topic: walking in the rain.
— Paramendra Kumar Bhagat (@paramendra) May 16, 2025
I do it. You just do it. Just get started. Make a walk from machine to machine. I think the trick is to not try to lift too heavy. Start light. Do some weight you can do. For a few weeks. Then increase.
— Paramendra Kumar Bhagat (@paramendra) May 16, 2025
Cancer research has been accelerating and on the news with discoveries, better diagnostics and smarter treatments. It’ll take time to see it all implemented, but I’ve never been more hopeful about what’s coming.
— Peter H. Diamandis, MD (@PeterDiamandis) May 15, 2025
Is this debate time sensitive?
— Paramendra Kumar Bhagat (@paramendra) May 16, 2025
Do you angel invest?
— Paramendra Kumar Bhagat (@paramendra) May 16, 2025
— Paramendra Kumar Bhagat (@paramendra) May 16, 2025
A lot of people that never traveled to China are shocked when they realize their entire perception of China was based on government propaganda. pic.twitter.com/F4MAhwFFoZ
Twitter for many years has been a place for polarized ideas clash, supported by algorithm that loves engagements and arguments. Its a place where commons sense and reality die. I wish I could have followed the advice from this video 5 yrs ago. pic.twitter.com/mYJy3SWIRI
For the past month I debated with many people on Twitter about Tariffs and China. I sadly learned that sentiment in this video is common for progressive left leaning Americans. CCP & Democratic party are closely aligned in their belief that Americans are lazy and cant work. https://t.co/jKCtWLhCnL
Trump strutted into the weekend tariff talks like a peacock, chest puffed, promising to drag factories back to American soil and make Uncle Sam’s economy roar. But what did we get? A pathetic wet noodle of a deal where China just tossed a few tariff cuts our way, like crumbs to a…
Trump capitulated today. China who exports very little and consumes very little from US will lower Tarrifs. And That is it. I support Trump more than Dems. But lets call a spade a spade.... pic.twitter.com/mYxKNY2fYg
(1) Used Smartphones & Electronics (2) Pre-Owned Fashion (Clothing & Accessories) (3) Used Furniture & Home Appliances (4) Pre-Owned Vehicles (Two-Wheelers & Cars) (5) Kids & Baby Products
— Paramendra Kumar Bhagat (@paramendra) May 16, 2025
it is amazing and exciting how much software one person is going to be able to create with tools like this.
"you can just do things" is one of my favorite memes; i didn't think it would apply to AI itself, and its users, in such an important way so soon. https://t.co/6QrZkV4oo9
Actually what is unfortunate is that with your blind lust to try to score cheap publicity points & please some people sitting across the border, you refuse to acknowledge that the IWT has been one of the biggest historic betrayals of the interests of the people of J&K. I have… https://t.co/j55YwE2r39
While our social media army is urging a boycott of Turkey, Ankara is at the heart of the ongoing Ukraine-Russia peace negotiations and placing itself at the centre of the multi polar new world order. Turkish drones were used by Ukraine in war but that hasn’t stopped Russia, our…
— Rajdeep Sardesai (@sardesairajdeep) May 16, 2025
As someone involved in academic research on AI, it is notable to me that most of the key experiments showing the impressive abilities of AI on work, medicine, psychology, and so many other fields were done on GPT-4… a model that is now so obsolete that it is gone from ChatGPT. pic.twitter.com/kt7gatmbEB
There Are Two Chinas, and America Must Understand Both The technological success that has captured the attention of many in the United States is one aspect of the Chinese economy. There’s another, gloomy one. ....... The other China — gloomy China — tells a different story: sluggish consumer spending, rising unemployment, a chronic housing crisis and a business community bracing for the impact of the trade war. ....... China’s solutions come with a lot of pain ......... Just like the United States, China is a giant country full of disparities: coastal vs. inland, north vs. south, urban vs. rural, rich vs. poor, state-owned vs. private sector, Gen X vs. Gen Z.
The ruling Communist Party itself is full of contradictions. It avows socialism, but recoils from giving its citizens a strong social safety net.
.............. Despite the trade war, the Chinese tech entrepreneurs and investors I talked to over the past few weeks were more upbeat than any time in the past three years. Their hope started with DeepSeek’s breakthrough in January. Two venture capitalists told me that they planned to come out of a period of hibernation they started after Beijing’s crackdown on the tech sector in 2021. Both said they were looking to invest in Chinese A.I. applications and robotics. ............. But they are much less optimistic about the economy — the gloomy China. ........... they believed that China’s advances in tech would not be enough to pull the country out of its economic slump ........ Advanced manufacturing makes up about only 6 percent of China’s output, much smaller than real estate, which contributes about 17 percent of gross domestic product even after a sharp slowdown. .............. When I asked them whether China could beat the United States in the trade war, nobody said yes. But they all agreed that China’s pain threshold was much higher. ............. It’s not hard to understand the anxiety felt by Americans frustrated with their country’s struggles to build and manufacture. China has constructed more high-speed rail lines than the rest of the world, deployed more industrial robots per 10,000 manufacturing workers than any country except South Korea and Singapore and now leads globally in electric vehicles, solar panels, drones and several other advanced industries. ............ China’s top-down innovation model, heavily reliant on government subsidies and investment, has proved to be both inefficient and wasteful. Much like the overbuilding in the real estate sector that triggered a crisis and erased much of Chinese household wealth, excessive industrial capacity has deepened imbalances in the economy and raised questions about the model’s sustainability, particularly if broader conditions worsen. .......... In 2018, the country had nearly 500 E.V. makers. By 2024, about 70 remained. Among the casualties was Singulato Motors, a start-up that raised $2.3 billion from investors, including local governments in three provinces. Over eight years, the company failed to deliver a single car and filed for bankruptcy in 2023. ........... The Chinese government tolerates wasteful investment in its chosen initiatives, helping fuel overcapacity. But it is reluctant to make the kind of substantial investments in rural pensions and health insurance that would help lift consumption. ........ “Technological innovation alone cannot resolve China’s structural economic imbalances or cyclical deflationary pressures” ...... “recent advances in technology may reinforce policymakers’ confidence in the current path, increasing the risk of resource and capital misallocation.” ............ The Chinese leadership’s obsession with technological self-reliance and industrial capacity is not helping its biggest challenges: unemployment, weak consumption and a reliance on exports, not to mention the housing crisis. .......... Youth unemployment is 17 percent. The real numbers are believed to be much higher. This summer alone, China’s colleges will graduate more than 12 million new job seekers. ........... Trump was not wrong in saying factories are closing and people are losing their jobs in China. ......... In 2020 Li Keqiang, then the premier, said the foreign trade sector, directly or indirectly, accounted for the employment of 180 million Chinese. “A downturn in foreign trade will almost certainly hit the job market hard,” he said at the onset of the pandemic. Tariffs could be much more devastating. ........... In April, Chinese factories experienced the sharpest monthly slowdown in more than a year while shipments to the United States plunged 21 percent from a year earlier. .......... Mr. Chen lives in the gloomy China. He stopped taking the vaunted high-speed trains because they cost five times as much as a bus. Flying is often cheaper, too. ........ many local governments, even in the wealthiest cities, are deeply in debt. ............... Because he’s in his late 30s, Mr. Chen is considered too old for most jobs. He and his wife had given up on buying a home. Now with the trade war, he expects that the economy will weaken further and that his job prospects will be dimmer. ........ “I’ve become even more cautious with spending,” he said. “I weigh every penny.”
........... Onshoring or relocation of manufacturing to a home country is a very complex decision for companies. It is based on the costs of doing business in different countries; tariff and non-tariff barriers of doing business; proximity of production to markets; availability and cost of resources such as raw materials, finance and labor; and companies’ long-term strategies. ......... Onshoring decision analysis itself takes months if not years, and must be cleared by multiple levels within organizations, and by country regulatory agencies at local and national levels. ........ reshoring to America will require investments in land, buildings, equipment and workforces within the U.S. Higher costs on these was a major reason why offshoring occurred in the first place. Costs of all these factors of production have escalated over the past few decades. With under 17 percent of the U.S. economy in the manufacturing sector, some of these factors, and a manufacturing ecosystem, are simply no longer available in America. .......... Reshoring would also require rebuilding the supply chain. Global supply chains are complex and multi-leveled. There are many layers of suppliers based in different countries with different tariff rates. Large companies have thousands of suppliers. Renegotiating contracts can take months or even years. Higher tariffs will increase the cost of supplies from even home-based suppliers, if those suppliers are using imported goods. ........... A third complexity that companies cannot necessarily trust that the current Trump tariffs will remain stable for long enough to match corporate calculations for return on investment. Large-scale investments involved in moving manufacturing across nations run into the hundreds of millions of dollars. These sunk costs take upwards of 10 years to recoup. .......... Trump’s flip-flopping on tariff rates, application dates, delays and reversals in his first administration — and his current attitude that countries can individually negotiate lower tariff deals with him — presents no guarantee of stability. Instead, it injects enormous uncertainty into the decision for any corporate board to accept. Shareholders would likely sue corporate boards that approve such uncertain investments. ..........
the hope that tariffs will lead to onshoring of manufacturing to the U.S. is a fantasy.
......... What can companies to do to minimize the disruption from these tariffs? There are many variations of onshoring that they can consider — re-shoring, friend-shoring, partial onshoring. Companies can re-shore from a present location to a lower-tariffed nation in their current vicinity. They can move to tariff-advantaged friendlier shores. ..... the most likely response for now is for companies to continue rationalizing and diversifying their supply chains.
Trump's tariff strategy can work but America still needs deeper economic reform President Donald Trump’s tariff diplomacy has been a shock treatment to the global economic order, intended as a kind of radiation and chemotherapy to kill the cancer that created the Rust Belt. But overdoing the treatment can kill the patient instead, without removing the carcinogens in the economy. Fortunately, the administration’s negotiators have called a truce, and we can reevaluate the treatment’s effectiveness. .......... President Trump has also used the threat of tariffs very effectively to help secure America’s southern border and stem the flow of fentanyl, which had become the number-one killer of young people. .......... the drama around tariffs has had side effects, like chemotherapy killing off healthy cells in the body. This collateral damage could be found in survey data from the regional Federal Reserve Banks and purchasing manager indexes, all of which pointed to sharp declines in business optimism and planned capital expenditures. ........ the on-again-off-again nature of these tariffs has made it extraordinarily difficult for businesses and consumers to plan. There has also been substantial turbulence in Treasury markets, gold prices, and equities. ........ Just throwing tariffs at the problem is like undergoing chemotherapy and radiation without any lifestyle changes. Imagine enduring all the painful side effects of such treatments while smoking cigarettes, maintaining a poor diet, avoiding exercise, and exposing yourself to asbestos and too much sunlight—that’s the equivalent of what’s happening today!........ the regulatory compliance cost for manufacturers in America is about $50,000 to $60,000 per worker, and then there’s a tax burden on top of that. Reducing trade abuses is insufficient to reform the domestic policies which have made American workers unemployable in many industries.
The real breakthrough in U.S.–China trade talks is much bigger than just tariffs Quietly, Washington and Beijing agreed to establish a formal "trade consultation mechanism," a permanent bilateral platform to hold structured talks on currency policies, market access, and non-tariff barriers. While bureaucratic in tone, this institutional move may prove to be the most consequential economic shift in years. ......... The U.S.–China imbalance isn’t simply a matter of bad trade deals or American overconsumption. It’s a structural problem embedded in the international monetary framework, and for the first time in a generation, both countries appear ready to talk about it seriously. ........... This deeper imbalance is something Stephen Miran—who now serves as chair of the President’s Council of Economic Advisers—laid out in extraordinary detail in a 41-page report published in November 2024. Titled "A User’s Guide to Restructuring the Global Trading System," the paper explains how the current dollar-centric model locks the United States into persistent trade deficits while encouraging surplus economies like China to underconsume and overproduce. These excess savings are then recycled into U.S. financial assets, particularly Treasuries, which props up the dollar and erodes American manufacturing. ......... The result? A lopsided economic order where the U.S. acts as consumer of last resort and global debtor-in-chief, while countries like China flood the world with goods but face chronic domestic stagnation. .......... a "Triffin World," referencing economist Robert Triffin’s famous dilemma: When a national currency is also a global reserve, it eventually becomes impossible to balance domestic and international obligations. To satisfy global demand for safe assets, the U.S. must run deficits, which hollow out its own economy. Meanwhile, surplus nations avoid necessary reforms at home because the system rewards their export-heavy models. ........... What Miran proposes is a structural recalibration—realigning currency values to reflect underlying economic conditions, discouraging excessive reserve accumulation, and encouraging more balanced capital flows. ............. The fact that this new U.S.–China mechanism explicitly includes discussions on currency and non-tariff measures suggests that Miran’s framework is already influencing policy. This is more than a détente—it’s the first real move to unwind Bretton Woods II. ..........
Could it be deliberate? As in, a decision that more people should see it? Just like you open up Twitter and the first thing you see is an Elon Musk tweet.
— Paramendra Kumar Bhagat (@paramendra) May 15, 2025
For 40 years, we’ve believed the best technology is built with accessibility in mind.
We’re proud to share new accessibility features to help more people navigate the world, express themselves, and stay connected. #GAADhttps://t.co/W6YW81e962
First and foremost, I want to thank President @RTErdogan for organizing the opportunity for direct negotiations – that was exactly the signal we had received. The Ukrainian side confirmed its readiness, and today, we are here in the capital, in Ankara.
But I'd still make an argument for a Wikipedia killer, a Khan Academy disruptor (note: I am fans of both). There is still massive room to present well. What AI generates is like accessing a database.
— Paramendra Kumar Bhagat (@paramendra) May 15, 2025
What Would a Truly Great Global Trade Architecture Look Like?
Imagine a world where trade isn't a zero-sum game but a collaborative engine for shared prosperity, sustainability, and innovation. A world where both the rich and the poor win. Where technological progress doesn't deepen inequality but closes the gap. Where economic integration respects sovereignty and uplifts the weakest. That world demands a new global trade architecture—radically reimagined, boldly inclusive, and fundamentally just.
Today’s system, built on 20th-century frameworks like the WTO and Bretton Woods institutions, is increasingly outdated. The dominance of the U.S. dollar, the rigidity of old trade deals, the exploitation of labor in the Global South, and the ecological blind spots of modern capitalism are symptoms of a deeper problem: the system was never built to serve everyone equally.
But what if we rebuilt it from scratch?
1. A Multipolar Currency System
The dollar-centric system gives the U.S. immense power—over sanctions, debt, and trade. But it also creates fragility, as seen in the weaponization of finance and the vulnerability of developing countries to dollar shortages. A truly fair trade architecture would move toward a multipolar currency system, where regional currency blocs (e.g., the euro, yuan, rupee, and a digital BRICS token) operate in parallel.
This doesn’t mean war on the dollar—it means optionality. It means a Digital SDR 2.0—a new synthetic reserve asset governed by a reformed IMF or a new global financial body that reflects current economic realities. Such a system could price commodities in a basket of currencies, reduce dependency on any single economy, and give developing countries more autonomy.
2. Tiered Tariff and Access System for Global Equity
Not all countries are equal in their starting points. So why should they all be treated the same in trade? A just system would introduce a Tiered Trade Framework:
Tier 1: Least developed countries receive zero tariffs, technology transfer incentives, and favorable access to capital and IP.
Tier 2: Middle-income countries get reduced tariffs and support to move up value chains.
Tier 3: Advanced economies operate on a level playing field with each other but contribute to a Global Trade Equity Fund to support sustainable development and logistics infrastructure in the poorest regions.
This is affirmative action at a planetary level—necessary, overdue, and ultimately beneficial for global stability.
3. Trade for Climate and Labor Justice
Trade agreements must include binding climate and labor clauses. No nation should gain a competitive edge by destroying its forests or exploiting its workers. A new architecture would penalize carbon leakage and illegal labor practices with automated sanctions and redirect the penalties to a Climate Reparations and Adaptation Fund.
Green exports would be incentivized. Countries investing in renewable energy, regenerative agriculture, or circular economies would receive fast-track trade approval and tariff discounts. Environmental trade courts could resolve disputes based on science, not geopolitics.
4. Decentralized Trade Dispute Mechanisms
Today’s WTO appellate system is paralyzed. A new architecture would implement regional and thematic arbitration panels, powered by AI-assisted legal reasoning and blockchain for transparency. Disputes would be resolved in months, not years.
Moreover, citizen juries and global observers could be involved in sensitive decisions involving human rights or environmental concerns, adding legitimacy and ethical accountability to economic rulings.
5. Universal Digital Trade Identity and Inclusion
Billions are still unbanked and disconnected. A bold trade framework would enshrine Universal Digital Trade Identity—secure, portable, privacy-respecting credentials enabling individuals and small businesses to engage in global commerce. This could ride on infrastructure like India’s Aadhaar+UPI stack, adapted globally via open protocols.
Trade is not just between nations—it’s between people. Decentralized commerce platforms, powered by smart contracts, AI translators, and mobile micro-logistics, would make even a rural weaver in Malawi a global trader.
6. Reformed China, Responsive America, Empowered South
A global deal would require hard reforms in every direction.
China must address forced technology transfers, state subsidies, and digital opacity. In return, it gains full legitimacy in shaping new rules.
The U.S. must loosen its grip on global financial levers and shift toward partnership over dominance. It could become a climate-tech exporter, not just a rule enforcer.
Africa, South Asia, and Latin America must rise from dependency to agency. Their voice should count more in global bodies. Their firms must be integrated into value chains, not stuck in commodity traps.
7. Planetary Marshall Plan
Global trade must be underpinned by global investment. A "Marshall Plan for the Earth" would inject trillions into resilient infrastructure, education, health, and internet access. This wouldn’t be charity—it would be smart trade stimulus. A better-educated, healthier, digitally connected world is a bigger market for all.
Funding could come from a mix of carbon taxes, wealth levies on MNCs, and sovereign contributions. The returns? Peace, prosperity, and planetary survival.
Conclusion: The Deal of the Century
This isn’t utopian. It’s necessary. The post-WWII order was built in the rubble of crisis. Today, we face polycrisis—climate, inequality, AI disruption, geopolitical fragmentation. We can either compete ourselves into collapse or cooperate into renaissance.
A new global trade architecture must be:
Multipolar, not monopolized
Inclusive, not extractive
Green, not growth-at-any-cost
Transparent, not opaque
Efficient, but also ethical
Let every nation sit at the table not as beggars or bullies—but as co-authors of a better global deal. The world is overdue for a Bretton Woods 2.0. Let's write it together.
For 40 years, we’ve believed the best technology is built with accessibility in mind.
We’re proud to share new accessibility features to help more people navigate the world, express themselves, and stay connected. #GAADhttps://t.co/W6YW81e962
From China to India: Apple’s Supply Chain Shift and the American Manufacturing Mirage
For over a decade, Apple’s iPhones have been synonymous with China—not because they are designed there, but because they are built there. The sleek devices that power much of modern life emerge from sprawling mega-factories operated by Foxconn and other contract manufacturers in Chinese cities like Zhengzhou and Shenzhen. But the winds are shifting. With rising geopolitical tensions, supply chain risks, and a changing global economy, Apple is now looking more seriously at India. President Donald Trump, however, has been vocal in opposing this pivot, pushing instead for Apple to manufacture at home in the United States. But is that realistic? Why China in the first place? Why India now? And can the U.S. realistically reclaim the iPhone?
Why China?
1. Scale and Specialization:
China’s dominance in electronics manufacturing is not an accident. Over decades, the country developed massive clusters of specialized suppliers, a deep bench of skilled labor, and infrastructure that rivals the best in the world. Cities like Shenzhen aren’t just home to factories—they are ecosystems. If Apple needs a particular screw, hinge, or chip adapter, it can be sourced within a few hours’ drive. The ability to ramp up production by hundreds of thousands of units within days is a capability few countries can match.
2. Labor Supply and Cost:
Although labor costs have risen in China, they’re still lower than the U.S., and importantly, the Chinese workforce is highly experienced in electronics assembly. Foxconn alone employs hundreds of thousands of workers at its iPhone factories, operating with military-style efficiency.
3. Government Support:
Chinese local and central governments have provided subsidies, tax breaks, land, and other incentives to tech manufacturers. The “Made in China” push is a coordinated national priority, which has aligned well with Apple’s logistical needs.
Why India Now?
1. Diversification Strategy:
COVID-19 exposed the fragility of overconcentration in one country. Apple, like many multinationals, realized that putting all its manufacturing eggs in China’s basket was risky. Geopolitical tensions—especially the U.S.-China trade war—added urgency. India offers an alternative that could mitigate these risks.
2. Government Incentives:
The Indian government has rolled out Production Linked Incentives (PLIs) and other programs to woo global manufacturers. These programs offer cash incentives based on output, along with land and tax concessions.
3. Growing Domestic Market:
India is expected to become the second-largest smartphone market in the world. Apple’s local production in India not only reduces tariffs on imported devices but also positions it well to serve this massive consumer base.
4. Young Labor Force:
India has a demographic advantage—millions of young workers entering the labor market every year. With training, they can become a reliable source of skilled labor.
5. Foxconn and Tata Collaboration:
Apple is not going it alone. Taiwanese giant Foxconn is already operating in India and expanding. Tata Group, one of India’s largest conglomerates, is joining hands with Apple’s suppliers to build out manufacturing capabilities.
Trump’s Opposition: Made in America?
Donald Trump has consistently pushed for manufacturing to return to the United States. His "America First" platform calls for companies like Apple to create jobs domestically. While emotionally and politically appealing, the economics and logistics of this are more complex.
What Would It Take to Build iPhones in the US?
1. Labor Costs:
Wages in the U.S. are significantly higher than in China or India. An iPhone assembled in the U.S. would likely cost significantly more to produce—costs that might be passed on to consumers.
2. Lack of Manufacturing Ecosystem:
The U.S. does not have the kind of dense, interlinked supplier networks that exist in Shenzhen or even emerging clusters in India. Rebuilding such a network would take years and billions of dollars in investment.
3. Workforce Challenges:
U.S. workers are not trained in high-volume electronics assembly at scale. Training a new workforce and changing cultural attitudes toward factory jobs would be a major endeavor.
4. Regulatory and Infrastructure Costs:
Environmental regulations, zoning restrictions, and bureaucratic delays would make large-scale factory construction and operation more challenging compared to China or India.
Is U.S. iPhone Manufacturing Realistic?
In niche areas—like high-end Mac Pro assembly—yes, and Apple has already dabbled in that. But for mass production of hundreds of millions of iPhones per year? Not yet. It would require massive policy intervention, long-term industrial planning, and a cultural shift. While not impossible, it's far from economically viable in the short term.
Conclusion: A New Global Balance
Apple’s pivot from China to India is not a rejection of China’s capabilities but a strategic diversification driven by risk management, cost optimization, and political calculation. India is not yet a full replacement for China—but it's on the path. As for the U.S., the dream of Made-in-America iPhones remains largely aspirational, unless there’s a seismic shift in manufacturing economics and policy.
In the coming decade, Apple may evolve into a truly global manufacturer—designing in California, assembling in India, and still keeping a foot in China. And that, perhaps, is the new face of globalization in the 21st century.
Opinion: Trump’s tariffs won’t bring manufacturing back to America The tariffs invoked retaliation of a 125 percent tariff from China, America’s largest trading partner. They broke an 80-year bond of friendship with our neighbor and closest ally, Canada. They have left our allies in Europe perplexed to embittered. The fallout is not over yet. ........... The economic rationale for the tariffs is they will bring back manufacturing to the U.S. The architect of this outmoded idea is the economist Peter Navarro. His theory is that as goods become more expensive to import into the U.S., companies will start relocating their manufacturing here — an idea called “onshoring” of manufacturing. .........
the idea of onshoring is a fallacy.
........... Onshoring or relocation of manufacturing to a home country is a very complex decision for companies. It is based on the costs of doing business in different countries; tariff and non-tariff barriers of doing business; proximity of production to markets; availability and cost of resources such as raw materials, finance and labor; and companies’ long-term strategies. ......... Onshoring decision analysis itself takes months if not years, and must be cleared by multiple levels within organizations, and by country regulatory agencies at local and national levels. ........ reshoring to America will require investments in land, buildings, equipment and workforces within the U.S. Higher costs on these was a major reason why offshoring occurred in the first place. Costs of all these factors of production have escalated over the past few decades. With under 17 percent of the U.S. economy in the manufacturing sector, some of these factors, and a manufacturing ecosystem, are simply no longer available in America. .......... Reshoring would also require rebuilding the supply chain. Global supply chains are complex and multi-leveled. There are many layers of suppliers based in different countries with different tariff rates. Large companies have thousands of suppliers. Renegotiating contracts can take months or even years. Higher tariffs will increase the cost of supplies from even home-based suppliers, if those suppliers are using imported goods. ........... A third complexity that companies cannot necessarily trust that the current Trump tariffs will remain stable for long enough to match corporate calculations for return on investment. Large-scale investments involved in moving manufacturing across nations run into the hundreds of millions of dollars. These sunk costs take upwards of 10 years to recoup. .......... Trump’s flip-flopping on tariff rates, application dates, delays and reversals in his first administration — and his current attitude that countries can individually negotiate lower tariff deals with him — presents no guarantee of stability. Instead, it injects enormous uncertainty into the decision for any corporate board to accept. Shareholders would likely sue corporate boards that approve such uncertain investments. ..........
the hope that tariffs will lead to onshoring of manufacturing to the U.S. is a fantasy.
......... What can companies to do to minimize the disruption from these tariffs? There are many variations of onshoring that they can consider — re-shoring, friend-shoring, partial onshoring. Companies can re-shore from a present location to a lower-tariffed nation in their current vicinity. They can move to tariff-advantaged friendlier shores. ..... the most likely response for now is for companies to continue rationalizing and diversifying their supply chains.
Trump's tariff strategy can work but America still needs deeper economic reform President Donald Trump’s tariff diplomacy has been a shock treatment to the global economic order, intended as a kind of radiation and chemotherapy to kill the cancer that created the Rust Belt. But overdoing the treatment can kill the patient instead, without removing the carcinogens in the economy. Fortunately, the administration’s negotiators have called a truce, and we can reevaluate the treatment’s effectiveness. .......... President Trump has also used the threat of tariffs very effectively to help secure America’s southern border and stem the flow of fentanyl, which had become the number-one killer of young people. .......... the drama around tariffs has had side effects, like chemotherapy killing off healthy cells in the body. This collateral damage could be found in survey data from the regional Federal Reserve Banks and purchasing manager indexes, all of which pointed to sharp declines in business optimism and planned capital expenditures. ........ the on-again-off-again nature of these tariffs has made it extraordinarily difficult for businesses and consumers to plan. There has also been substantial turbulence in Treasury markets, gold prices, and equities. ........ Just throwing tariffs at the problem is like undergoing chemotherapy and radiation without any lifestyle changes. Imagine enduring all the painful side effects of such treatments while smoking cigarettes, maintaining a poor diet, avoiding exercise, and exposing yourself to asbestos and too much sunlight—that’s the equivalent of what’s happening today!........ the regulatory compliance cost for manufacturers in America is about $50,000 to $60,000 per worker, and then there’s a tax burden on top of that. Reducing trade abuses is insufficient to reform the domestic policies which have made American workers unemployable in many industries.
