We got the tickets to the holiday shows, we’re preparing the food, now the presents and we’re all set for the holidays. I think I’ll go all American and buy iPhones for anyone that doesn’t have one already. After all, Steve Jobs is American and has done a great job for his company recently with all his new inventions taking off. The stock alone just about tripled in the last six months and that iPad is in every bag and briefcase. Lets help the economy and buy American. NOT!
Academic researchers estimate that Apple Inc.’s iPhone-one of the best-selling U.S. technology products-actually added $1.9 billion to the U.S. trade DEFICIT with China last year. How is this possible? The researchers say traditional ways of measuring global trade produce the number but fail to reflect complexities of global commerce where the design, manufacturing and assembly of products often involve several countries.
Trade statistics in both countries consider the iPhone a Chinese export to the U.S., even though it is entirely designed and owned by a U.S. company, and is made largely of parts produced in several Asian and European countries. China’s contribution is the last step-assembling and shipping the phones. So the entire $178.96 estimated wholesale cost of the shipped phone is credited to CHINA, even though the value of the work performed by the Chinese workers at Hon Hai Precision Industry Co. accounts for just 3.6%, or $6.50, of the total, the researchers calculated in a report published this month.
The result is that “even high-tech products invented by U.S. companies will not increase U.S. exports,” wrote Yuqing Xing and Neal Detert, two researchers at the Asian Development Bank Institute. This is an ongoing problem and a basis for political battles waging in Washington and Brussels over what to do about China’s currency policies and its allegedly unfair trading practices. The research also found that Chinese labor accounts for only a few dollars of the iPod’s value, even though trade statistics credited China with producing its full value. The moral of this story is that American inventors are F--ked and our economy is F--ked and we are all duped that we will ever buy American again. Oh the holidays get me going!!