“Leaders of Apple Inc., Google and other U.S. technology giants head to China this weekend to pursue a familiar goal: To do more business in the world’s most populous nation. The effort has had mixed results, at best, in the past,” Mark Gurman reports for Bloomberg. “With a trade war brewing between the world’s two largest economies, the goal has gotten loftier still.”
“Tim Cook, chief executive officer of Apple, Sundar Pichai, CEO of Google, and Ginny Rometty, head of IBM, are scheduled to attend the China Development Forum, an annual gathering that helps Western corporations build relationships with the country’s government officials,” Gurman reports. “On Thursday, President Donald Trump ordered 25 percent tariffs on at least $50 billion of Chinese imports, including information and communication technology. He also accused China of stealing intellectual property. China responded with its own duties on some U.S. imports.”
Gurman reports, “Apple could see a negative effect on about 15 percent of its business if China were to retaliate with duties on imports of U.S. products, Loup Ventures’ Gene Munster said in an email earlier on Thursday.”
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“On Thursday, President Donald Trump signed an executive memorandum to impose tariffs on up to $60 billion in Chinese imports. China then hit back with tariffs of its own on 128 U.S. products with an import value of $3 billion,” Arjun Kharpal reports for CNBC. “China’s government hasn’t specifically named the technology sector as one of its targets, but could potentially do so if the trade war was to escalate. Even if it did, analysts have said that the big technology giants in the U.S. would be insulated.”
“Apple, perhaps, looks the most vulnerable. The company is arguably one of the only big U.S. tech firms to have a decently-sized business in China and is the fifth-largest smartphone vendor in the country,” Kharpal reports. “In the three months to the end of December, its Greater China revenues totaled $17.9 billion, up 11 percent year-on-year.”
‘For (Tim) Cook and co, given the tightly-woven integration between Apple and Foxconn in China, we believe there is minimal risk to this relationship in our opinion and the last thing China is going to do is tinker with the Apple machine and impact its significant billions of investments in the country and major consumer sales within China, despite fears,'” Kharpal reports quoting an email from Daniel Ives, head of technology at GBH Insights.
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MacDailyNews Take: The tightrope Tim Cook tries to negotiate in China grows ever more tenuous.
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