President Trump is determined to bring tech manufacturing to the US via massive tariffs. But there's little chance companies like Apple (AAPL) will reinvent their supply chains before Trump leaves office in 2028.

The Trump administration hit China with a whopping 145% tariff on Chinese-made goods before announcing exemptions for tech devices ranging from smartphones to laptops on Friday. But Commerce Secretary Howard Lutnick said during an interview with Jonathan Karl of ABC News on Sunday that the move was temporary and only applied to Trump's reciprocal tariffs.

Instead, he explained, tech products will be tariffed as part of the administration's planned duties on semiconductors, which could be announced later this week.

Still, even the threat of sky-high tariffs won't be enough to force tech giants like Apple to pick up and move their suppliers to the US en masse.

Read more: The latest news and updates on Trump's tariffs

"Anything is possible, but the setup of smartphone production in India has been a three-year process from site identification through ramped-up production, with at least another two years to achieve full supply chain integration," Chris Rogers, head of supply chain research at S&P Global Market Intelligence, told Yahoo Finance.

It's not just about timing. Companies would also need the workers to build devices.

Reuters / Reuters

"While there's a degree of automation possible and while many of the components needed are made in the US, there's still a need for tens of thousands of trained electronics assemblers willing to work long, arduous hours in highly repetitive tasks," he added.

Building in the US isn't impossible but is highly unlikely

Companies including Nvidia (NVDA), TSMC (TSM), Apple, and others have announced increased investments in the US to win over Trump and avoid tariffs. On Monday, Nvidia said it will produce $500 billion in AI infrastructure in the US over the next four years through partners including Foxconn (601138.SS), TSMC, and Wistron (3231.TW).

Apple also said it will spend $500 billion, and TSMC has said it will spend $165 billion. Many of those plans, however, were already in the works or don't necessarily go above prior spending levels. Nvidia, for example, talked up building chips in the US last year.

And while that doesn't take away from the fact that the companies are pouring money into the US, it doesn't exactly support the idea that they're moving vast amounts of their manufacturing capabilities to America.

"We believe hardware companies will remain focused on accelerating US-bound product assembly out of China, and see India and Mexico as the most-likely incremental beneficiaries of these actions (we'd argue Vietnam and Mexico have been the biggest beneficiaries over the last 5 years)," Morgan Stanley analyst Erik Woodring wrote in an investor note.

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"We just don't see large volume hardware production ever reaching US shores — these plans take years to devise, the costs (capex and opex) associated with manufacturing hundreds of millions of products annually in the US are high, and most importantly, tariff exemptions on finished goods disincentivize on-shoring (and is why we didn't see onshoring after President Trump's first administration)," he added

Even if companies brought their manufacturing bases to the US, they'd still have to deal with a host of headwinds ranging from worker salaries to the need to continue importing certain parts from abroad.

According to Bank of America's Wamsi Mohan, while Apple may be able to find enough laborers in the US to build its iPhones, importing the company's entire supply chain will still take some time.

"This is because, while it may be possible to move final assembly to the US, moving the entire iPhone supply chain would be a much bigger undertaking and would likely take many years, if even possible."

It's not just Apple that's contending with these issues. Everything from laptop makers to display producers would face the same problems if they were to move to the US. That doesn't even take into account the potential price increases associated with manufacturing tech products in the US.

According to some estimates, prices on devices could jump by hundreds of dollars, resulting in demand destruction as consumers seek out less expensive options or hold onto their existing smartphones and computers for longer periods.

While it's unlikely manufacturing is coming back to the US, there's still plenty of uncertainty about how tech companies and consumers navigate the next four years of tariff shocks.

yahoofinance

Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.

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