With the rise of the American President Donald Trump and his America First policy in World Politics, it seems that international realism is back in full force. From the start of his administration Trump has been a vocal critique of China’s economic policy and has urged American corporations to bring their business back to the United States.
In a recent article, Wattles and Westwood highlight Donald Trump’s efforts to bring Apple back to America by changing the way it makes the iPhone. Essentially, Donald Trump is trying to ensure that an MNC like Apple makes US national interest especially in the area of economic development its priority. Part of Trump’s rationale for bringing Apple back to America is his belief that “China is the biggest beneficiary of Apple — not us.” In other words, Trump is seeking to put America first by forcing Apple to bring the production of Apple products back to the U.S.
What the case of Trump and Apple demonstrate is the ability of states to force corporations to serve their national interests. Trump’s efforts to force Apple to serve American interests and make sure that the money that it is generating in its production process comes back to American pockets is a classic example of mercantilist economics. Such policy fails to recognize the global nature of the supply and production chain of most MNCs in the 21st century. As Wattles and Westwood point out, “The iPhone is produced through a complex, global supply chain. Moving it out of China would be extremely difficult and highly unlikely.” In fact, having Apple produce its iPhones in China is a much more cost-effective approach than bringing that process back to the United States given that it would significantly increase the price of iphones and affect the profits of the MNC. Thus, one of the major reasons why an MNC like Apple produces its iPhones in a country like China is primarily because it is cheaper to do so.
Some have argued that MNCs have become such powerful entities in the international system that they can often erode a state’s sovereignty. While this may be true in the developing world, the case of Apple and Trump is a clear indication that MNCs are or can still fall under the whim of state power. As Gilpin argues MNCs prefer to be stateless. However, States are the primary and most important entities of power in the international system and their sovereignty will always trump that of any other. In other words, corporations as non-state actors in the international system, may have become significant players in the area of business and development yet their activities can always be altered or limited by the authority of powerful states like the United States.
Gilpin, Robert. U.S. Power and the Multinational Corporation: The Political Economy of Foreign Direct Investment. Basic Books, New York, 1975.
Wattles, Jackie, and Sarah Westwood. “Trump Again Says Apple Should Change How It Makes the iPhone.” CNN, Cable News Network, 4 Jan. 2019, www.cnn.com/2019/01/04/tech/trump-apple-china/index.html.