America’s economy and society are at a critical juncture.
Like an energetic bunny, America dominated the twentieth century. The American Puritans in the North and West used technology to industrialize, electrify, and computerize the country. The Southern Cavaliers provided most of the fossil fuels needed to energize our progress. The USA developed a diversified economy that distributed its manufacturing and logistics operations using railroads and the interstate highway system throughout the country, as well as cargo shipping to other countries. It led the world towards a free-trade model that led to unprecedented economic progress and peaceful relations for 75 years.
President Trump and his economic advisors now tell us that foreign countries have “cheated”, “pillaged”, and undermined our economy. His team, with their hair on fire, says that these foreigners have hoodwinked or sedated American politicians and capitalists into a stupor. They indicate that Americans have become complacent. We have exchanged cheap foreign goods for the demise of our industrial infrastructure.
Has our nation become a sluggish bunny that has been lulled to sleep on the side of the road?
Has the formerly backward Chinese tortoise passed the sleeping American hare?
Foreign trade is and has always been a cut-throat business. For thousands of years, nations have competed, often violently, to gain trade advantages. The USA has not been a shrinking violet in the trade area. We have, over the last 250 years, exploited many countries and native populations, particularly to acquire raw materials, to gain trade advantages.
The current question for Americans is, will slapping massive tariffs on other countries stop the cheating and pillaging of our economy? Will the wisdom of the Trump advisors shown below solve a problem that may or may not exist to the extent alleged?
I think not. Trump’s scatter-brained (a term my mother called me when I did something stupid…should I have sued her for child abuse?) approach is unlikely to yield the desired outcome and is likely to make things worse.
The future is always problematic. Even when everything is great, someone might come along with a better idea that might quickly undermine someone’s greatness. For example, after killing all the mom and pop stores on Main Street, most of America’s shopping malls and big box stores were basking in their success. In 1994, almost everyone drove to the mall for their household needs. A few brave souls ordered merchandise from the Sears and Roebuck catalog.
In the summer of 1994, a management consultant named Jeff Bezos quit his job and founded a small company, operating out of his home garage, with the crazy idea of selling books using the internet. Today, it is clear that the internet model supplanted the shopping mall model. Today, people select and buy the products they need online, and they are delivered to their doorstep within a day or two.
As much as some might want to return to the 1950s, even a political mandate from a dictator cannot freeze progress. A region or country that attempts to retard beneficial progress will be left asleep on the side of the road.
When the Cheating and Pillaging Started
Starting with Steve Jobs I, in his first incarnation (1976-1985), Apple Computer’s manufacturing philosophy was to manufacture high-quality products in America. He was committed to keeping almost all Apple manufacturing in America.
The mature Steve Jobs II, when he returned (1997-2011) to make Apple great again, bluntly stated that the majority of Apple’s manufacturing work would never return to America. What happened?
A quote from an article in the May 1, 2025, issue of Inc. illustrates the competitive advantage that China has over the USA. There was a last-minute, vital design change to the iPhone’s screen around 2007. What could be done at the last minute?
Around midnight, a foreman “roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing more than 10,000 iPhones a day.”
Would American workers wake up in the middle of the night to work a 12-hour shift? The article also shares the results of a survey from the conservative/libertarian Cato Institute. Predictably, the survey confirmed Trump’s nostalgia for American manufacturing when 80 per cent of the respondents said there should be more manufacturing jobs in the USA. However, when asked, “Would you want to work in a factory?” Only 25 percent said yes.
Returning to Apple’s manufacturing history, Apple continued to manufacture most of its products domestically after Jobs left the company in 1985. However, the year before Jobs returned, Apple was selling its products BELOW COST. Apple could not make a profit by increasing its sales by losing money on each sale. In 1996-1997, Apple was on the verge of bankruptcy.
Steve Jobs returned in 1997 and, after hiring someone named Tim Cook, Apple began to revise its manufacturing strategy. The company tried many outsourcing solutions. They built their translucent iMac first in South Korea, and then in Mexico and Wales. They also started manufacturing products in the Czech Republic and China.
By 2003, Apple homed in on China. Interestingly, the suppliers for major American computer companies, such as Dell and Compaq, had beaten Apple to China.
Tim Cook led the charge into China. In a 2017 interview, Cook said the following:
“The quantity of skill in one location and the type of skill it is, the products we do require really advanced tooling and the precision that you have to have in tooling and working with the materials that we do are state of the art. And the tooling skill is very deep here. In the U.S. you could have a meeting of tooling engineers, and I’m not sure we could fill the room.
In China, you could fill multiple football fields.”
The magic of Tim Cook and the success of Apple was primarily because he was able to leverage American design and manufacturing know-how with a Chinese workforce to create the ultimate manufacturing model. Until robots take over all the manufacturing jobs, the connection between Apple and China is or was about as good as it gets. The contract/outsource model used by Apple and China gives Apple great flexibility and the Chinese workers’ income. Cook estimated that Apple uses three million Chinese workers per year to assemble its products.
Apple is not the only company using China to manufacture its products. Only about six percent of China’s manufacturing is connected to Apple; however, Apple is one of its biggest single customers.
The future is bright for China. They have tremendous manufacturing capacity and, thus far, a willing workforce. The country is moving in many directions, including electric vehicles. As one commentator said, “The reason China is so good at producing EVs…is because it’s a smartphone on wheels.”
China’s Achilles Heel is their rapid growth and wild economic gyrations. Their Communist Party may seem like a Stalin-like, top-down arrangement, but this is not true. While the Party controls the country politically, it allows incredible economic autonomy to regions and cities. In many ways, China’s recent successes have been due to its ability to create not one Silicon Valley, but dozens. The start-up mentality of these regions and cities often leads to many failures. They built eight-lane roads to nowhere. They built housing for 200,000 people, which sits idle because a major project was cancelled. China has its share of problems.
The premise of a recent book about the Apple/China connection by Patrick McGee is that China has captured Apple. The book says that China has provided so much flexibility and profit to Apple that it is almost impossible for them to extricate themselves from China.
It is hard for people who genuinely believe in the capitalist system to find fault with Apple’s pursuit of profit. From 2011 (the year Tim Cook became the CEO) to 2022, Apple’s market value rose an average of $700 million per calendar day!
If Apple had invested money in America’s Rust Belt in 2011 to manufacture its products, would it have added $700 million per day in value? Would Apple Computer be worth $3 trillion? Probably not.
The Future of Cheating and Pillaging
Trump, whether he knows it or not, is trying to force Apple to reduce its profit margins. Implicitly, he wants lumps of coal to fill the Christmas stockings of Apple stockholders. Most of Apple’s stockholders live in the USA. Should American investors suffer to satisfy the Trump Administration? Does the Trump administration support capitalism, or is it trying to institute a dictatorship or a criminal family enterprise with the Trump family in charge? I will be a little snarky and ask if Trump wants Apple to operate like one of his bankrupt New Jersey casinos of the 1990s.
However, in defense of the alarm expressed by the Trump administration, America’s diminished manufacturing capacity makes us vulnerable on many levels. If China decides to stop supplying the USA with one or more major products, what will we do? If the price of a particular type of product doubles (because of US tariffs or a Chinese profit motive), what will we do? If China invents a new technology based on its more intimate manufacturing knowledge, what will we do?
Apple sits on the fault line of this dilemma. Will moving to India solve their problem? How fast can they move to another country? Can they move the bulk of their manufacturing to Ohio?
Apple is holding a potential time bomb. How should this bomb be defused? Should an American dictator solve the problem or free-trade American capitalism? Incidentally, I remember when politicians on both sides of the aisle were in favor of free-trade capitalism. With what is the Trump administration replacing free-trade capitalism?
The Future of the American Economy and Society
We all know that the economy and technology have a significant influence on everyone in America. Despite MAGA’s overt support for America’s return to the 19th century, it is impossible to go back to those great days of yesteryear. Instead, we need to look forward, not backward.
In the 20th century, America helped to establish a free-trade, technology-driven world economy. What are we to do in the 21st century? Since one-quarter of this century is gone, it behooves us to start planning. Shall we return to the tried and true practices of the 19th century? Should we build a moat around the USA? Should we alienate our closest friends, like Canada, and punish those penguins on the Heard and McDonald Islands? Are millions of Americans in their twenties and thirties willing to live in factory dormitories and work twelve-hour shifts?
There is another wrinkle to the future of our economy and society. What will be the future impact of more advanced robotics and artificial intelligence (AI)? Fully automated self-driving cars and trucks will eventually (not today) make human drivers obsolete. The generic occupation of “driver” is one of America’s most common occupations. AI will or has threatened the jobs of sales representatives, ticket agents, account clerks, technical writers, web developers, insurance underwriters, tax preparers, and most data manipulation occupations. Robotics and AI have and will continue to alter manufacturing jobs. Interestingly, all these revolutions may eliminate more white-collar jobs than blue-collar ones. If AI can create any report, spreadsheet, computer program, or piece of knowledge, why will information-oriented white-collar workers be needed?
In the past, new technologies made occupations such as blacksmiths and horse handlers unneeded, but other new occupations, such as automobile mechanics, replaced them. However, advanced robotics and AI might not replace all the outdated occupations with new ones. Our society and economy will likely need a significant, top-to-bottom overhaul. The basic concepts of labor, taxation, workday, workplace, money, ownership, and many other fundamental ideas will need to be reexamined. The psychological shock to Americans preferring the 19th century will be profound.
The future is coming fast, and Americans need to think about it and prepare. Turning the clock back to 1892 or falling asleep on the side of the road are the worst possible approaches. We need to address the challenges of international trade in goods and services. However, negotiation using tweets and bullying techniques is scatter-brained and unproductive. Everyone, including Wall Street, now understands that Trump is 99% bluster. The only valid concern is that one day, Trump will act on one of his over-the-top threats.
America must continually review its trade relations. Because of our success over the last 75 years, we may have become complacent. However, a simplistic shotgun approach to trade relations with quixotic rifle shots at non-authoritarian countries like Brazil is scatter-brained. Musk’s ill-conceived chainsaw approach to government “reform” falls into the same category.