Analysts and supply chain experts are skeptical about the Trump Organization’s claim that its new smartphone will be “built in the United States.” Instead, they believe the $499 device will likely be produced in China, raising questions about the administration’s tariffs on imported goods.
The Trump Organization, known for its ventures in real estate, hospitality, and entertainment, announced on Monday that it would license its name to a new wireless service called Trump Mobile. This service will feature a gold-colored “T1” smartphone, set for release in August. The device will operate on the Google Android platform and utilize a wireless provider named Liberty Wireless.
Manufacturing Realities and Tariff Implications
While the Trump Organization has promoted the phones as “proudly designed and built in the United States,” experts suggest otherwise. Blake Przesmicki, an analyst at Counterpoint Research, noted that the U.S. lacks the necessary manufacturing capabilities, making it likely that production will be outsourced to a Chinese original device manufacturer (ODM) at least initially.
“Despite being advertised as an American-made phone, it is likely that this device will be initially produced by a Chinese ODM,” Przesmicki stated in a note published Monday.
Even if the U.S. had the capability to produce smartphones domestically, companies would still need to rely on imported components. The Trump Organization did not respond to requests for comment, but Eric Trump, executive vice president, acknowledged on The Benny Show podcast that Trump Mobile would not be entirely domestic at first. He suggested that the device is being produced or assembled overseas before its official launch.
Challenges in U.S. Manufacturing
President Donald Trump has attempted to revitalize domestic manufacturing through tariffs, but experts have long warned about the limitations of U.S. production. Apple, for instance, established its supply chain in China in the 1990s, and relocating it would involve significant costs and logistical challenges. According to Dan Ives, an analyst at Wedbush Securities, a U.S.-made iPhone could cost over $3,000 due to these factors.
Przesmicki highlighted the broader industry challenges, noting that no phones have been manufactured in the U.S. since the 2G era over a decade ago. The country faces weaker supply chains, fewer skilled employees in the smartphone sector, and lower profit margins.
“Generally, no phones have been manufactured in the U.S. since the 2G era in over a decade,” Przesmicki told Fortune. “We have weaker supply chains, fewer capable employees in the smartphone sector, lower margins.”
Leo Gebbie, principal analyst at CCS Insight, echoed these sentiments, suggesting that any domestic production of Trump-branded phones would be minimal. He emphasized that the idea of replicating large-scale production in the U.S. is unrealistic, particularly before the August launch.
“The idea that this could be replicated in the U.S. in any sort of short- to medium-term timescale is fanciful,” Gebbie said. “It is an absolute pipe dream.”
Tariff Challenges and Strategic Messaging
The importing of phone components, primarily from China, poses another challenge for the Trump Organization. The company could face tariffs imposed by the Trump administration, which were intended to discourage trade with China.
“This absolutely does raise the specter of the Trump Organization mobile falling foul of the tariffs that have been instigated by the Trump administration,” Gebbie noted.
President Trump recently threatened a 25% tariff on smartphones not produced in the U.S. and criticized Apple for manufacturing its iPhones in India. He warned of imposing a levy on Apple products if the company does not move production to the U.S. In response, Apple announced plans to invest $500 billion in expanding U.S. plants over the next four years.
Gebbie suggested that the Trump Organization’s emphasis on U.S. production, despite its unlikelihood, serves as a strategic message to larger companies.
“Maybe it provides leverage for the Trump administration to go out to device-makers like Apple and Samsung and say, ‘Hey, we are marking smartphones in the U.S. Why aren’t you?’” Gebbie said.
As the August release date approaches, the Trump Organization faces significant logistical and economic challenges in aligning its manufacturing practices with its public messaging. The situation underscores the complexities of shifting production to the U.S. amidst ongoing trade tensions and tariff policies.
