Why It's So Hard for Apple to Move Production from China to India

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Odd Lots 48 min 6 speakers 5 chapters transcribed 1 month ago
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What is the main topic discussed in this episode?

Francine Lacqua 0:00
Next week on Leaders with me, Francine Lacqua, I speak with Harvard Business School Professor Linda Hill about what CEOs need to know to be successful.
Tracy Alloway 0:10
It really is not about them. It is about the organization.
Francine Lacqua 0:13
About how to lead in the age of AI. That requires a lot of confidence. And why great leaders embrace conflict. You need to amplify difference. Listen and watch Leaders the Podcast with me, Francine Lacqua, on Bloomberg TV or wherever you get your podcasts.
Joe Weisenthal 0:30
Hello, Odlots listeners. I'm Jill Wisenthal.
Tracy Alloway 0:32
And I'm Tracy Alloway.
Joe Weisenthal 0:34
Tracy, we're doing another live show and it's right here in New York City.
Tracy Alloway 0:37
Yeah, this one should be our biggest yet. And we're gonna have a bunch of Odlots favorites and uh do something maybe a little different to some of our previous uh live podcast recordings.
Joe Weisenthal 0:48
When the guests are revealed, the show is gonna sell out right away. So you should really just go get your ticket right now. It's June twenty sixth. It's at Racket NYC, and you can find a ticket link at Bloomberg dot com slash oddlots or Bloomberg Events dot com slash oddlots live NY.
Tracy Alloway 1:04
We hope to see you there.
Francine Lacqua 1:08
Bloomberg Audio Studios,
Carol Masser 1:10
Podcasts, Radio, News.
Joe Weisenthal 1:24
Hello and welcome to another episode of the Outlock Podcast. I'm Joe Weisenthal.
Tracy Alloway 1:29
And I'm Tracy Alloway.
Joe Weisenthal 1:30
Tracy, I'm gonna confess something. I've kinda hinted it. It's not that big of a confession. I've and I've kinda hinted at it already, which is that If Trump wants to impose a bunch of tariffs on a bunch of cheap random plastic goods from China, I I'm fine with that. That's cool. Fifty percent, a hundred percent, hundred and forty nine percent, I'll consume less.

What is the background and purpose of the episode’s discussion on Apple’s supply chain?

Joe Weisenthal 1:51
I'll be a little bit more of a a monk or something like that. I'm fine with that.
Tracy Alloway 1:55
Okay, but isn't the argument not necessarily the cost, although there is a cost on individual consumers, but the argument is why do we want to focus on shifting plastic production and toy manufacturing to the US? That's the criticism, right? Like why specifically focus on cheap goods made in factories?
Joe Weisenthal 2:15
Yeah, no, you might be right. Like I don't think there's much value in say, you know, moving a plastic step stool factory or a stroller factory or whatever to the US. I don't I don't really see the point. I want there to be affordable strollers, obviously. Just by and large, a lot of this stuff, yeah, it's fine. We'll just we'll just put it in the street. This is
Tracy Alloway 2:35
not much of a confession.
Joe Weisenthal 2:37
Okay, but I will confess too that if the price of a new iPhone went up a lot, I would be pretty annoyed. I tend to notice these things. I tend to replace mine every two or three years or something like that. There are areas that we do import significantly from China that are not cheap Trotskis, cheap junk, as people like to fantasize that that's all China produces. There are areas that I would be very upset. set to pay a uh significantly higher price.
Tracy Alloway 3:04
Well, getting back to the goal of tariffs and protectionist trade policies, I assume, you know. Putting tariffs on iPhones would be about moving some of the production closer to home. And I think there's an open question about whether we want that as well. Because for most of our lifetimes, the stories we've been hearing about iPhones in China are all about how terrible the labor conditions are and how difficult it is to actually make these things. So I can see, you know, some strategic argument, obviously semi-controlled. Conductors are considered a very important strategic goal nowadays. Yeah. But the actual manufacturing, you know, there there is that China story out there.
Joe Weisenthal 3:44
Anyway, I think the administration is very sensitive to people like me. One of the first things, even in the midst of the heat of the trade war, and I should note we're recording this May twenty ninth. It could be that the whole trade war is illegal. There was that court ruling made last night. We really don't know where things can end up. They're clearly sensitive to the iPhone thing. And so there were some carve outs specifically related, more or less related to that. I think during the first Trump administration, Apple got some reprieve.

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