Trade Group Crunches Numbers On Trump’s Impossible Push For 100% US-Made Tech
"Arthur T Knackerbracket" writes:
One of Donald Trump's biggest goals as president is to increase domestic manufacturing and reshore supply chains so that the most in-demand technologies in the world can be 100 percent made in the United States.
By executive order last December, he launched his "Genesis Mission," an ambitious plan seeking to leverage US dominance in AI to maintain or seize an edge in advanced robotics, biotechnology, semiconductors, and nuclear technologies. According to Trump, that plan works best with self-sustaining supply chains. Not even neighboring countries or longtime allies should be relied upon to manufacture a single component of any US product in his ideal world.
The Consumer Technology Association (CTA) has long warned that Trump's reshoring goals are not grounded in reality, but only recently has America's largest technology trade association attempted to estimate what it would cost businesses and consumers to follow through on Trump's plan.
"It is no longer enough to say that reshoring is difficult," the CTA acknowledged. "The practical questions are what it would cost, product by product, what it would physically require, and who would pay for it."
In new research shared with members this week, the CTA warned that reaching full US production of 10 categories of products most commonly found in US homes by 2031 "would require between $185 and $230 billion in capital expenditure, 555,000 to 668,000 additional full-time employees, and 19.1-19.5 billion kilowatt-hours of electricity per year."
While the costs are eye-popping, the labor demand might be the bigger problem, requiring more than double the "existing US computer and electronics manufacturing workforce," the CTA said. Additionally, the energy demand required to reshore all supply chains at once would clash with huge energy needs of AI data centers over the same time period.
Product categories included computer monitors, laptops, robotic vacuums, smart speakers, smartphones, smartwatches, televisions, video game consoles, wireless earbuds, and wireless headphones.
Smartphones are in a "league of their own," the CTA said, emerging as the most expensive product to make in the US and the product that Americans consider least dispensable. Taking into account tariffs in place today, the cost of fully manufacturing a smartphone in the US would go up by 152 percent, CTA estimated, and some of those costs would inevitably have to be covered by consumers to maintain profit margins and keep investors happy.
The largest cost increases would be in products with processors, memory, and advanced displays, the CTA said. Building laptops would cost 93 percent more, and smartwatches 97 percent more. On the lower end of the spectrum, TVs would cost 41 percent more to build entirely in the US.
In this scenario, most tech companies wouldn't immediately pass all extra costs on to their customers. But any big price jumps could hurt Americans already pinching pennies. CTA's research indicated that companies could pass on between 25 and 50 percent of the cost increase.
On average, CTA estimated that "the 10 products in our report would see a weighted average price increase of 27 to 55 percent." For the most cash-vulnerable and value-seeking US families, that could quickly add up as the devices they depend on wear down.
"A household replacing a phone, a laptop, and a television over a typical replacement cycle would face that increase on each purchase," the CTA reported.
Households already facing budget strains-including rising costs of rent, groceries, and fuel-are already delaying technology purchases until prices come down in the US, the CTA reported. And while most people are unwilling to go without smartphones for very long, the fewer products that tech companies can sell over time, the worse their margins will get as they continue to absorb higher costs. As returns diminish, that could spook investors, the CTA suggested, making it even harder to reshore supply chains, despite Trump insisting that reshoring will ultimately attract more investment in the US. With each product category taking years to fully reshore, the jury is out on how many businesses could afford that, the CTA suggested.
Instead of rushing companies to invest in domestic manufacturing on expedited timelines that hardly anybody can afford, the CTA recommended a "first step" that could help tech firms manage costs while pursuing some reshoring.
Read more of this story at SoylentNews.