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Tariffs Threaten U.S. Factory-Building Boom, Apple's Margins; Trade War's Front Line Forms in Michigan By Mark R. Long

The Trump administration's new tariffs, aimed in part at rejuvenating American industry, are throwing a wrench into factory builders' plans and complicating a yearslong effort to revive U.S. manufacturing.

The WSJ's John Keilman and Owen Tucker-Smith write that factory investment in the U.S. has boomed in the past three years , driven partly by billions of dollars of Biden administration subsidies for semiconductor and electric-vehicle manufacturers, and renewable-energy projects. Companies also are shortening their supply chains that were strained during the pandemic. Record investment in manufacturing-related construction last year continued in the first two months of 2025. Now, new tariffs on steel and aluminum will send the cost of metal panels, metal studs and structural steel up 20% to 30% over the next year, construction firm Skanska estimates. Plumbing equipment prices could rise as much as 10% and drywall as much as 20%, alongside higher costs for generators, HVAC gear, roofing products and insulation.

Figuring out new costs is complex: An industrial chiller made in a U.S. factory, for instance, might contain wire from China, steel from Canada, pipes from India, harnesses and fan coils from Mexico, motors from Germany, copper from Peru and electronics from Korea-which could be subject to an array of tariffs.

Governments worldwide are focused on whether they could make a deal with Trump to soften the blow from his tariffs. Tariff increases are likely to be passed on to consumers while companies look for cheaper locations. (WSJ) Trump administration officials and lawmakers are considering a new bailout for U.S. farmers amid warnings about the fallout from new tariffs. (WSJ) CONTENT FROM: PENSKE Gain a Leg Up. Gain Ground with Penske.

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Number of the Day Electronics Manufacturing

Apple sources components for its iPhones from all over the world, and they are brought together primarily in China. Moving this assembly process to the U.S. wouldn't be cheap or easy.

The Journal's Joanna Stern, Adrienne Tong and Nicole Nguyen report that the hardware inside an iPhone 16 Pro, plus assembly and testing, costs Apple about $580, according to analyst Wayne Lam at TechInsights. Factoring in new tariffs on imports from China of about 54%, that cost jumps to about $850. This would bite hard into Apple's margins. Moving iPhone manufacturing to the U.S. would be a yearslong, mammoth job, and the company would still have to pay levies on the device's many imported parts.

Companies that built up Asian supply chains over decades say they have little choice but to pass on the cost of new tariffs. (WSJ) Nintendo delayed preorders for its Switch 2 console indefinitely, after Trump announced tariffs on key manufacturing bases. (WSJ) Quotable Endangered Wolverine State

With nearly a fifth of its economy tied to the auto industry, Michigan is on the front line of President Trump's trade war and already is feeling the opening salvos from tariffs that threaten to blow a hole in the state's economy.

The WSJ's Jeanne Whalen and Christopher Otts write that Michigan ranks fifth in the nation for the size of its imports and exports because its auto sector has become so dependent on parts and vehicles from Canada, Mexico and China. Trump's steep tariffs have prompted automakers to stockpile imported components and wrestle with suppliers over price increases. It isn't just cars. The new tariffs threaten the state's agricultural sector and its burgeoning technology industry. Levies on steel and aluminum imports that took effect in March are starting to bite Michigan manufacturers.

What you need to know about how tariffs are hitting the auto industry . (WSJ) In Other News

U.S. employers added 228,000 jobs last month while the unemployment rate ticked up to 4.2%. (WSJ)

Employment in Canada fell by 32,600 jobs in March, leaving the unemployment rate to tick up for the first time in four months, rising to 6.7%. (WSJ)

Export-heavy China's vulnerability to a trade fight raises the stakes for its efforts to stimulate domestic consumption. (WSJ)

Trump is pressing for access to mineral rights across the globe, hoping to outduel China in a global competition for raw materials. (WSJ)

China said restrictions on exports of rare earth minerals announced in response to reciprocal tariffs won't affect the stability of the international supply chain. (Bloomberg)

For Europe, tightening ties with China could come at a steep price-including the loss of its auto industry. (WSJ)

The International Maritime Organization adopted new guidelines to protect seafarers from unfair treatment when detained in foreign jurisdictions over alleged crimes at sea. (American Journal of Transportation)

A group of 18 farm state Republican lawmakers is warning that a U.S. Trade Representative proposal to reinvigorate U.S. shipbuilding would damage domestic agriculture . (Journal of Commerce)

Chinese-sponsored upgrades to a naval base in Cambodia aimed at diversifying China's regional maritime access were completed. (South China Morning News)

French cooperative Windcoop placed a construction order for an open-hatch, sail-powered cargo ship with Turkey's RMK Marine. (Maritime Executive)

Chinese e-commerce marketplace Temu signed an agreement to use DHL's logistics services in Europe. (Air Cargo News)

The investment arm of Singapore's Berge Bulk bought a 7.3% stake in U.S.-listed Genco Shipping & Trading. (TradeWinds)

About Us

Mark R. Long is editor of WSJ Logistics Report. Reach him at [mark.long@wsj.com]. Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long , Liz Young and Paul Berger .

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

April 07, 2025 07:07 ET (11:07 GMT)

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