Amit Kundwal
Appearances
Planet Money
Tariffs, grocery prices and other listener questions
Hello, Willa. Hey, Amanda. So this question comes from listener Brian Bunton from South Carolina, and he wrote in to ask about his iPhone. He says it's three years old. He probably doesn't need to upgrade it for a few years, but he wants to know— Willa, is it possible that he has called the wrong show?
Planet Money
Tariffs, grocery prices and other listener questions
OK, so he wants to know, should he go ahead and get a new phone before Trump takes office, given that Trump is promising to increase tariffs?
Planet Money
Tariffs, grocery prices and other listener questions
Yes, exactly. So I called up Yale economics professor Amit Kundwal, who said that one scenario is that maybe there just won't be tariffs on iPhones because companies can request exemptions.
Planet Money
Tariffs, grocery prices and other listener questions
Yeah, so iPhones were almost subject to tariffs, but Tim Cook, CEO of Apple, during the last trade dispute, he went to Trump and was like, listen, if you put tariffs on the iPhones that we assemble in China, those tariffs will make it harder for my American company to compete with Androids, many of which are made by Samsung, South Korean company, which does a lot of its manufacturing in Vietnam.
Planet Money
Tariffs, grocery prices and other listener questions
And ultimately, there was never a tariff on iPhones. Also, Tim Cook does seem to be maintaining his relationship with Trump. He recently visited Mar-a-Lago. Also, he donated a million dollars to Trump's inauguration fund.
Planet Money
Tariffs, grocery prices and other listener questions
Right. Although Trump has also said that he would increase tariffs on everything coming from China.
Planet Money
Tariffs, grocery prices and other listener questions
No, not all of them. So for years, iPhones have been assembled in China, in the city of Zhengzhou, at a factory that is so big, it is sometimes called iPhone City. But yeah, like you said, since the pandemic, also because of increasing tensions with China, also labor costs, more and more companies are using a business strategy called China Plus One.
Planet Money
Tariffs, grocery prices and other listener questions
And the idea is like, yes, still make stuff in China, sure, but also... branch out, make things in another country too. And so these days, yeah, Apple is making more and more of its iPhones outside of China.
Planet Money
Tariffs, grocery prices and other listener questions
Yeah, but it is also hard to know just how long to wait for a couple of reasons. First, because tariffs don't all get imposed at once. Since the trade dispute with China began, there have been multiple rounds. And next, because once a tariff gets announced, there's no standard amount of time for how long it actually takes to then go into effect. And then, even when those tariffs do take effect...
Planet Money
Tariffs, grocery prices and other listener questions
Like, who knows how long it'll take before those extra costs wind up getting passed on to us. Right. And they may not get passed on at all. Right. Although, you know, research from the last trade dispute showed that usually they did. And by the way, I asked Apple to talk about all of this, all their tariff plans. They didn't get back to me.
Planet Money
Tariffs, grocery prices and other listener questions
So actually, when I called up Brian to talk about all this, he had a confession.
Planet Money
Tariffs, grocery prices and other listener questions
You did? I did. Can you tell me why? Was it because of the kinds of questions you wrote in about?
Planet Money
Tariffs, grocery prices and other listener questions
Well, I asked him, did Brian do the right thing?
Planet Money
Tariffs, grocery prices and other listener questions
Yeah, but, you know, Brian owns other things, and he was looking around his house thinking, like, I don't know, other tariffs?