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Case studies: The iPhone case
One of the ways in which existing trade statistics misdirect public policy and public opinions is their failure to capture the domestic value added that is derived from imports. A much cited example comes from the popular iPhone. Apple, the company that makes such products as the iPad and the iPhone, has been the subject of much public and political criticism in the United States for its "offshoring" of the production of its products to China, adding to the already large trade deficit with China, and its avoidance of state, local, and federal taxes through its overseas activities. iPhone Study Value of inputs from U.S. shipped to China (included in U.S. exports) $ 10.75 Value of inputs shipped to China from other countries $ 161.71 Manufacturing costs to China $ 6.50 Wholesale value of iPhone shipped to U.S. (included in U.S. imports) $ 179.00 Retail value of iPhone sold in U.S. stores (included in PCE) $ 499.00 This public image of Apple, and a similar percepti...