THE MANUFACTURER’S DILEMMA

On the outside, the iPhone looks like the pinnacle of cool Californian tech. Open it up, however, and the device seems a lot less American. Its components might have been designed in the United States, but they’re assembled in China, as are a dizzying range of other popular products: televisions, sneakers, even drones and defense equipment. That fact creates a glaring security threat—one that Western firms and governments are only now beginning to tackle.

Using Chinese suppliers seems to make good economic sense for Western firms. After all, Chinese labor remains very cheap: Such work accounts for just $10 of the total cost of an iPhone today (top models of which go for more than $1,000). That’s why, according to a recent tally by the , “of the production facilities operated by Apple’s top 200 suppliers,