January 17, 2018

Apple is taking its talents overseas. It’s a business decision that’s been carried out for years, but emerging from the shuffle of this year’s tax reform, I think it’s fair to ask: is Apple an American company?

The factories left first, of course. Apple’s suppliers are from nearly 30 other countries. Apple’s citizen-identity is now left solely in ownership of the ideas produced by the American engineers and executives who design the next big Apple products.

They are leaving too, now. It’s not immediately noticeable, for if you drive through Cupertino you’ll still see employees and a headquarters. The company isn’t leaving, but the value they create for our country is.

What began as American intellectual property is now owned by a nation-less archipelago of corporate jargon.
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Here’s how it works. The valuable intellectual property of Apple America’s best and brightest creations is sold cheaply to subsidiaries in low-tax countries. Then, when Apple sells the products, it re-routes them from assembly centres in China through the foreign subsidiary holding the intellectual property. The income from export sales gets booked there, not in the US.

What began as American intellectual property – the ingenuity supposed to be America’s competitive advantage in the 21st century – is now owned by a nation-less archipelago of corporate jargon.

If Apple, the most successful enterprise of the information age, is not American, then something is wrong with our model. Globalisation is based on the assumption that economic gains from a more open global economy will offset losses in American jobs. What happens if the gains get shipped abroad along with the jobs?

Some further reading: Apple’s Exports Aren’t Missing: They Are In Ireland – Council on Foreign Relations.

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Introduction to this Under-reported series.

Senator Tom Cotton’s contribution: ObamaCare’s central feature has been repealed.

Summary guide to all under-reported articles in this series.

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