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PaperclipPerfector  8d ago (text post)   31570 thread views

Culture War Roundup for the week of April 7, 2025

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Yes, however, they get paid a small fraction of the total value.

Most of the bill of materials by value doesn’t come from inside China, it’s shipped there, and then an American firm pays them 10 bucks to assemble it all together, for a $1000 phone.

This is just one more part of why the method of computing trade balances by looking at bilateral difference completely bonkers.

I think we underestimate assembly to our peril. You can't just slap them together like lego, you need quality control and various kinds of precision engineering capabilities. The Iphone is very small and thin, you need tight tolerances and clever tricks.

"Cook has stated, "The products we do require really advanced tooling. And the precision that you have to have in tooling and working with the materials that we do are state-of-the-art. And the tooling skill is very deep here [in China]." He further noted, "In the U.S. you could have a meeting of tooling engineers and I’m not sure we could fill the room. In China, you could fill multiple football fields."

15-30% of the value of an Iphone is not trivial and not easily replaced!

Indeed, but it is curious that they would only be paid a tiny amount for that if it was such a high fraction of value.

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