I have nothing against you President Trump. I have nothing for you either.
But, when I heard of the directive to manufacture iPhones in USA, I had to write this post.
This is one of the weakest ideas I have heard from Supply Chain point of view, and I am not indulging in a political debate.
I am merely pointing out what even a supply chain new comer will tell you – with the current global configuration of supply network of companies such as Apple, any meaningful change of this nature will be impossible to achieve.
Why?
Because, Apple supply chain has been extensively studied and documented. One of the better reports (though a bit dated) is located at this link and I am sourcing a few relevant data below from this report. For example, take a look at the following table showing key supply chain activity location sourced from (https://www.apec.org/-/media/APEC/Publications/2013/7/Global-Supply-Chain-Operation-in-the-APEC-Region-Case-Study-of-the-Electrical-and-Electronics-Indust/2013_psu_GSC_EE.pdf):
It is clear almost all the activities happen in the Far-East. Now take a look at another table, also sourced from the same report (https://www.apec.org/-/media/APEC/Publications/2013/7/Global-Supply-Chain-Operation-in-the-APEC-Region-Case-Study-of-the-Electrical-and-Electronics-Indust/2013_psu_GSC_EE.pdf):
By Peacefulmovements [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)], from Wikimedia CommonsNone of this is news, even to neophytes in the game of business. To unravel and roll back supply chain globalisation achieved over decades will be near impossible, even for the most determined politician.
Global economy is delicately perched, and precariously balanced. It is also top heavy – just like the picture.
It does not matter how we got here.
It does not even matter which stone represents whom – bankers, politicians, business people, academics, common man – we are all going to fall in a heap together if a massive re-balancing of the stones is attempted at this juncture.
If a populist like Trump were this close to the presidency in a large emerging nation, investors would be fleeing, the currency would be falling, and the economy would be in trouble. That is not happening in the United States, which I think is attributable to the fact that institutions are much stronger in the United States, and markets don’t believe Trump could get any of his more radical proposals, like banning Muslims or slapping high unilateral tariffs on trade rivals, through Congress or the Courts. But there has also been a persistent and deep reluctance to believe that Trump can actually win, and he has already proven doubters wrong by winning the GOP nomination.
He usually doesnt honour his words so its difficult to say. But, according to his current policy outlines:
Harder trade negotiations with Mexico, China etc: Global trade usually contracts due to long recessions, as people whose lives were pretty good in good times usually dont know whom to blame and blame anything foreign. In this context you can expect global trade to contract even further so a step back on so called globalization.
Republicans usally are more free market oriented and cut taxes(though I think Trump is a Democrat posing as a Republican) which leads to a short term boom as both investments and consumption rise.
Republicans usually take a much harder line in terms of foreign policy so it becomes much more probable for US to go to war ( I think if Osama Bin Laden would have been found in Pakistan with a Republican US president, Pakistan would be having a much harder time)
Nutshell I think a big boom followed by a bigger crisis.
Thanks for the A2A. Honestly though? There’s really no way to be sure.
For one, I’m not confident we actually know what Trump would do. I lost all confidence in that when he started talking about how he loved the Bible so much, in terms that made it clear he’d never really studied it. I trust very few things that have come out of his mouth as his real view on things. The protectionism and nationalism do seem among the more consistent, but…can we be really sure?
Trumph will change the global politics on some extent. As now America adopting neutral policy on relegion propaganda it will surely gain polarity. Trumph could creat an opposite wave against Muslims as he expressed in his recent election campaigns. As now world is seems to be polarize in many areas like as SCS, surely Trumph will also push it toward polarization. as America hold duplicity in its relations with many countries to maintain its own profit, perhaps Trumph might change it with establish direct relations.
This augurs extremely-well for the world’s economy. Most OECD countries are run by professional politicians who have no experience in the world of business. Even physicist Angela Merkel comes from the fiat reality world of academia. Trump understands what is required to consummate a major project, from finance to procurement of thousands of items. He also understands the people who put these items together and appreciates their gifts. It will be a Golden Age for those who produce wealth and add value!
It is clear almost all the activities happen in the Far-East. Now take a look at another table, also sourced from the same report (https://www.apec.org/-/media/APEC/Publications/2013/7/Global-Supply-Chain-Operation-in-the-APEC-Region-Case-Study-of-the-Electrical-and-Electronics-Indust/2013_psu_GSC_EE.pdf):
It is clear almost all the activities happen in the Far-East. Now take a look at another table, also sourced from the same report (https://www.apec.org/-/media/APEC/Publications/2013/7/Global-Supply-Chain-Operation-in-the-APEC-Region-Case-Study-of-the-Electrical-and-Electronics-Indust/2013_psu_GSC_EE.pdf):
5 Responses
If a populist like Trump were this close to the presidency in a large emerging nation, investors would be fleeing, the currency would be falling, and the economy would be in trouble. That is not happening in the United States, which I think is attributable to the fact that institutions are much stronger in the United States, and markets don’t believe Trump could get any of his more radical proposals, like banning Muslims or slapping high unilateral tariffs on trade rivals, through Congress or the Courts. But there has also been a persistent and deep reluctance to believe that Trump can actually win, and he has already proven doubters wrong by winning the GOP nomination.
He usually doesnt honour his words so its difficult to say. But, according to his current policy outlines:
Harder trade negotiations with Mexico, China etc: Global trade usually contracts due to long recessions, as people whose lives were pretty good in good times usually dont know whom to blame and blame anything foreign. In this context you can expect global trade to contract even further so a step back on so called globalization.
Republicans usally are more free market oriented and cut taxes(though I think Trump is a Democrat posing as a Republican) which leads to a short term boom as both investments and consumption rise.
Republicans usually take a much harder line in terms of foreign policy so it becomes much more probable for US to go to war ( I think if Osama Bin Laden would have been found in Pakistan with a Republican US president, Pakistan would be having a much harder time)
Nutshell I think a big boom followed by a bigger crisis.
Thanks for the A2A. Honestly though? There’s really no way to be sure.
For one, I’m not confident we actually know what Trump would do. I lost all confidence in that when he started talking about how he loved the Bible so much, in terms that made it clear he’d never really studied it. I trust very few things that have come out of his mouth as his real view on things. The protectionism and nationalism do seem among the more consistent, but…can we be really sure?
Trumph will change the global politics on some extent. As now America adopting neutral policy on relegion propaganda it will surely gain polarity. Trumph could creat an opposite wave against Muslims as he expressed in his recent election campaigns. As now world is seems to be polarize in many areas like as SCS, surely Trumph will also push it toward polarization. as America hold duplicity in its relations with many countries to maintain its own profit, perhaps Trumph might change it with establish direct relations.
This augurs extremely-well for the world’s economy. Most OECD countries are run by professional politicians who have no experience in the world of business. Even physicist Angela Merkel comes from the fiat reality world of academia. Trump understands what is required to consummate a major project, from finance to procurement of thousands of items. He also understands the people who put these items together and appreciates their gifts. It will be a Golden Age for those who produce wealth and add value!