“President Trump’s escalation of a trade war with China is about to hit tech on two important fronts, putting it smack dab in the middle of what some are calling a Tech Cold War,” Jon Swartz writes for Barron’s. “The initiatives, expected to be announced by the end of the week, would limit China’s ability to invest in the U.S. tech sector, and block additional technology exports to Beijing.”
“Trump’s plan, first reported by the Wall Street Journal late Sunday, immediately drew a cautionary note from the trade group Information Technology Industry Council, whose members include Apple, Amazon.com and Alphabet,” Swartz writes. “China’s influence on tech runs far and deep. A recent study by the U.S.-China Economic and Security Review Commission concluded seven major American tech companies–Cisco Systems, Dell Technologies, HP, IBM, Intel, Microsoft, and Unisys — source more than half of their products and components from China. Shares of Intel, Microsoft, HP, IBM, Cisco, Dell, and Unisys each are down more than 2% today.”
The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street! – U.S. President Trump via Twitter, June 24, 2018
The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street!
— Donald J. Trump (@realDonaldTrump) June 24, 2018
“Last week, Terry Gou, chairman of Foxconn Technology Group–a key iPhone assembler that will bring an assembly facility to Wisconsin and create up to 13,000 new jobs–told shareholders at the company’s annual meeting in Taiwan that ‘we have a number of response plans.’ ‘The trade war is not about trade, but it is a tech war, and it is a manufacturing war,’ Gou said,” Swartz writes. “Among the most vulnerable companies is Apple, which has bet big in China. Nearly 20% of its fiscal year revenue ($44.7 billion) came from the region, where it shipped more than 41 million iPhones in that same time. Apple shares are down more than 2% today… (Apple did not immediately respond to an email seeking comment on Trump’s plan.)”
Read more in the full article here.
MacDailyNews Take: It’ll be interesting to see how it all shakes out; if the imbalance becomes more balanced in the end.
I’m cognizant that in both the U.S. and China, there have been cases where everyone hasn’t benefited, where the benefit hasn’t been balanced. My belief is that one plus one equals three. The pie gets larger, working together. — Apple CEO Tim Cook, March 24, 2018
SEE ALSO:
U.S. President Trump puts tech in trade war crosshairs with planned curb on China investment – June 25, 2018
The Trump administration told Apple it would not place tariffs on iPhones assembled in China – June 19, 2018
Chinese stocks end at 2-year low, Apple suppliers sink on trade-war concerns – June 19, 2018
Why Apple CEO Tim Cook is acting like tech’s top diplomat – June 18, 2018
Apple CEO Tim Cook doesn’t expect a full-blown trade war between the U.S. and China – June 5, 2018
President Trump and Apple CEO Cook meet at White House with trade the focus – April 25, 2018
Apple CEO Cook to meet with President Trump – April 25, 2018
Why Apple stock can withstand a Chinese trade war – April 5, 2018
Apple CEO Tim Cook heads to China as President Trump orders 25 percent tariffs on up to $60 billion in Chinese imports – March 23, 2018
BoA Merrill Lynch: Apple is prepping a ‘foldable’ iPhone; U.S. and China trade tensions not an issue for Apple – March 23, 2018
Designed in California. Assembled in China. How Apple’s iPhone skews U.S. trade deficit – March 21, 2018
President Trump blocks Broadcom-Qualcomm deal over China concerns – March 13, 2018
Elon Musk sides with President Trump on trade with China – March 8, 2018
Analyst: President Trump’s tariff impact on Apple would be just a ’rounding error’ – March 7, 2018
Apple and other tech firms caught in crossfire as U.S.-China trade war looms – March 7, 2018
Apple Macs caught up in President Trump’s aluminum tariff plan – March 2, 2018
Silicon Valley needs some rattling.. Course, being in an Earthquake zone, where a large quake will inevitably come, and unless they are really lucky like they were in 1989 where it only lasted 15 seconds, or is on a fault closer to home, much of Silicon Valley is going to wish it had built or been somewhere else..
If international trade were only so simple. The 21st C level of down or upstream supplier linkage, transcending any one country, has become rather complex and at the same time fragile. While imposing tariffs or restricting tech investment may make for short-term political points, the possibility of triggering a global or regional recession in the long-term cannot be overlooked or ignored. Stock dropping 2% may be the tip of the iceberg if US retaliatory trade actions towards other countries escalate further.
Or, perhaps, the US will gain newfound respect and finally cease being shafted at the hands of feckless politicians like Clinton, Bush and Obama who were proven to be pushovers unable to make deals that benefited the country they were supposed to be representing.
Exactly which countries do you anticipate that increased respect coming from?
Respect has to be earned and is easily squandered. Look at the recent G7 summit and see how it has been widely referred to as the G6+1 after Trump was so out of line with the other world leaders. It sharply contrasted with previous summits when previous presidents from either American party were actively engaged throughout those summits. Petulant hostility towards nations which have for decades been friends and staunch allies is not a clever strategy.
The “easy to win” trade war isn’t going at all well so far and we are already seeing American farming and manufacturing jobs put at risk. China will shortly be retaliating further in ways which could damage American companies in the longer term and there is a widespread feeling that a global depression may be imminent if cool heads do not prevail.
The world is a complex place and simplistic solutions rarely work out as intended, especially when those countries you offend are powerful and with sophisticated, long sighted leadership.
And I think that the media, at least what I read was polite to refer it to the G6+1. From the looks of it, G7-1 would have been more accurate and telling from a certain perspective, i.e. you are not inviting someone new in and adding them to the group, you are getting rid of, subtracting dead wood.
LOL MDN you freaking dopes, the tang-orangutan doesn’t give two shits for you or your precious aapl stock! Farming Maroons.
Geez MDN sure likes to delete posts. So much for me stating that respect has to be earned. Since you guys have lost it internationally, you will have to earn it again.