The Trump administration told Apple it would not place tariffs on iPhones assembled in China

“Apple’s chief executive, Timothy D. Cook, may be the leader of the world’s most valuable public company, but lately he has had to act a lot like the tech industry’s top diplomat,” Jack Nicas and Paul Mozur report for The New York Times. “Last month he visited the Oval Office to warn President Trump that tough talk on China could threaten Apple’s position in the country. In March, at a major summit meeting in Beijing, he called for “calmer heads” to prevail between the world’s two most powerful countries.”

“In a trade and technology showdown between the United States and China, Apple and Mr. Cook have a lot to lose. With 41 stores and hundreds of millions of iPhones sold in the country, there is arguably no American company in China as successful, as high-profile and with as big a target on its back,” Nicas and Mozur report. “Under Mr. Cook’s leadership, Apple’s business in China grew from a fledgling success to an empire with annual revenues of around $50 billion — just a bit under a quarter of what the company takes in worldwide. He did this while China was tightening internet controls and shutting out other American tech giants.”

“Now, with the Trump administration saying on Monday that it will identify another $200 billion worth of Chinese goods that could face tariffs on top of the $50 billion already planned, and China having threatened retaliation, Apple is stuck in the middle,” Nicas and Mozur report. “The Trump administration has told Mr. Cook that it would not place tariffs on iPhones, which are assembled in China, according to a person familiar with the talks who declined to speak on the record for fear of upsetting negotiations. But Apple is worried China will retaliate in ways that hamstring its business, according to three people close to Apple who declined to be named because they were not authorized to speak publicly.”

Read more in the full article here.

MacDailyNews Take: Saber-rattling heightens the appreciation of the resultant peace.

SEE ALSO:
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

50 Comments

    1. And torture worked so well in 1478 but the free and civilized world has moved forward since then.

      It’s nice that Apple’s been told that it won’t place tariffs but I would not be surprised if China doesn’t come up with a way to impede Apple and that’s where it’s gets kinda tricky. I mean it’s one thing for a war mongering nation to bully their way into a smaller adversary looking for a weapons of mass destruction program but to pick on someone close to their own size, that takes something special, something that for me makes this quote so appropriate.

      “Because we’re so stupid.”
      Donald Trump.

      Oh and you’ve been writing some wonderful reasonable stuff recently that I’ve been really enjoying. Thank you for the dedication to making this site one where ideas can be read and discussed without a myriad of insults.

    1. Apple can’t ship jobs out that weren’t in the US to begin with. How many iPhones were made in the US in 2007 before those jobs were shipped out? Right, none. Apple has added almost 100,000 jobs in the US since the launch of the iPhone. And, those are the direct hires. Add in all the jobs created by the App economy and the number is many times higher. Without mobile apps, where would Facebook, Instagram, etc., etc., etc. be? All those grew on the back of the success of the iPhone and all of its progeny. So, who’s been paying the “FREIGHT” and who doesn’t know the first thing about the actual facts? Can’t have a rational discussion when the facts aren’t even known.

      1. Talk about not knowing the facts. The discussion started with tariffs involving the U.S. and China, NOT App jobs. If Apple gets rich on cheap labor, they can afford the FREIGHT …

        1. The topic of discussion is not a “fact”.

          You did not mention “tariffs” anywhere. Your comment was not a response to anyone, since you quoted nothing. You wrote one sentence and mentioned “labor” and “jobs”. I mentioned App jobs, as an addition to the 100,000 direct hires. It was peripheral to the discussion, and yet, that’s what you focus on.

          If Apple is getting “rich on cheap labor”, then why don’t all companies that manufacture in China get “rich on cheap labor”?

          You really should just change your screen name to Curmudgeon. Nothing stops the grumbling and complaining, not facts, not rational thought, nothing.

          1. “If Apple is getting “rich on cheap labor”, then why don’t all companies that manufacture in China get “rich on cheap labor”?”

            Gee, I simply don’t have an immediate accounting of ALL China companies that are getting “rich on cheap labor.” Like other posters here, spare me the deflective topics and stay on point …

  1. And then we read officials in the administration saying that that isn’t true. So, who to believe? Unfortunately, as we’ve learned with the current administration, we can’t believe anyone.

      1. Trump always wanted to be the best in the world at something. Well, he succeeded. No president has ever lied so much, so often and so blatantly as this president has. He is the BEST liar-in-chief . . . ever!
        Believe me!

        1. President Trump is something your hateful attitude totally missed. He is a first time REMAKABLE politician that bested 16 GOP political candidates. And then proceeded to beat the biggest Democrat warchest in political history, over a billion dollars! Please get a grip and grow up to give credit where credit is DUE …

          1. Here’s what the Trump party want’s you to totally miss.
            The Republican Party couldn’t make up their minds who they wanted to run for president. The GOP candidates were too selfish to drop out and the voters, who didn’t like Trump, never knew who to vote for. Trump had the name recognition no one else had, he also had a clean slate as he never held any office. He has a record now and the Republicans would be a fool to let him run again as he has no chance winning again.
            Want proof? Just see how quickly republicans turn on Trump once he is out of office and has nothing to offer them.

          2. The man is a moral degenerate, a con man, a liar, incompetent in business, and has exhibited criminal behavior. While in Office he’s working on increasing his businesses, apparently accepting bribes, pRticularly from China. It appears Putin has something on him, otherwise his attitude towards Russia makes no sense. He admires, openly, tyrants, describing Jong-Un as “tough” when shown that he operates concentration camps.

            He never admits mistakes, and blames others for his, and takes credit for the success of others. About the Nkorea agreements, he just said that if they don’t work out, he won’t admit it, and would probably make some excuses.

            Many of his followers, which is the correct term, as he’s a demagog, are out and out racist neo Nazis, and have admitted it, saying that with Trump in Office they’re “mainstream”. It’s disgusting. These people will never admit that what he does is wrong as long as he supports their unAmerican beliefs.

            I think I covered most of it.

            1. I don’t worship him, Bob. I will admit he has many character flaws, loose with the facts, but they are TRUMPED by his remarkable successes all his life. Like President Trump, I could not care less about what the Democratic Party, teachers, media and Hollywood thinks about him. All I care about is legislative reform making the country GREAT …

            2. Let’s be real GoeB.
              You get on your knees every morning and ask which body part he wants you to kiss that day. Except his heart, he has none.

        2. “Trump always wanted to be the best in the world at something. Well, he succeeded.”

          YES HE DID!

          As a first time politician he bested the largest field of GOP candidates EVER and the first billion dollar Democrat media annointed candidate.

          NO ONE, including you can take that away from him. Absolutely REMARKABLE….

  2. By starting the trade war to begin with, they’re already increasing the cost of the iPhone. How tariffs get applied won’t be entirely up to Trump once he opens that can of worms.

    China will retaliate, and their retaliation could impact iPhone production at a far greater level. They could easily apply tariffs to components being imported into China for iPhone assembly or place taxes on the production itself.

    Apple, and others, are too reliant on Chinese assembly. Bringing assembly into the US would be impossible more so than being incredibly expensive, so Apple (and others) will pay taxes for the assembly which will be split between decreased return for shareholders and higher prices for customers.

    China wins by collecting these taxes and continuing to provide the assembly.

    1. “Bringing assembly into the US would be impossible more so than being incredibly expensive, so Apple (and others) will pay taxes for the assembly which will be split between decreased return for shareholders and higher prices for customers.”

      Thanks for admitting Apple takes advantage of CHEAP labor. No wonder they have more MONEY than any other company …

      1. Stating the obvious = admitting?

        That wasn’t even the point to begin with. Apple couldn’t bring assembly to the US for a variety of logistical reasons that also involve a massively insufficient labor pool. If there were magically large numbers of workers with the necessary skills in the US, there would still be a tremendous cost involving infrastructure, supply and other transition costs.

        As such, it’s not a realistic option. China knows this and can leverage Apple’s position to retaliate against Trump’s tariffs.

        Again, it’s not just Apple, it’s a large number of our tech companies and other industries that now depend on China in one way or another.

        1. A prior generation would differ with your dismal outlook.

          At the outbreak of WW2, the US military was rated by the Pentagon itself as 13th most powerful in the world. Isolationists held sway in Congress and private industry was relatively weak as the global economy had been poor since the 1929 market crash.

          Then Hitler went on the rampage. Rather than allow all of Europe , the Middle East, and Africa to fall into Nazi control, FDR actually saw value in standing with the Allies. With exceptional leadership, FDR fostered lasting diplomatic achievements to stop the scourge of fascism. He forged ties with industry to invest in the war effort, making the USA #1 in practically all industrial and military measures within just a few years. The USA, unlike Germany, prevailed handily in a 2-front war. Then the USA had enough class to forgive foreign debts, air ship humanitarian aid to needy civilians, rebuild destroyed cities, and found new treaty alliances with the purpose of resolving conflicts more effectively before they flare into open warfare.

          Since the end of WW2, has the USA gotten so fat and lazy and ignorant that it cannot compete? We all know that we haven’t had a great leader in the White House since Eisenhower, and the short term oriented CEOs have sold out American industrial capacity for cheap foreign labor in communist countries, but why exactly is it not possible for high tech automated production to occur anywhere in the world including the USA? With a little better leadership, the USA should be able to leverage its infrastructure and knowledge and, yes, cheap labor that Trump is currently trying to block at the border, to enable another industrial renaissance. The USA needs all levels of skills – basic labor through Phd — and it appears the only ones Trump actually cares about include himself and whatever photo op gives him the best political press in front of his low-intelligence base.

          1. “A prior generation would differ with your dismal outlook.”

            Probably, but here we are today. My outlook isn’t dismal per se, but rather an acceptance of the reality and looking at the opportunities today.

            If it came down to another WW, certainly production could (and would) ramp up domestically, but keep in mind that when Rosie the Riveter went to work, there were numerous shortages and rationing of all kinds of things due to production diversion (among other causes).

            “the short term oriented CEOs have sold out American industrial capacity for cheap foreign labor in communist countries”

            In terms of Apple, what we have is the ability to focus jobs in America in terms of what it does best and generate a ton of jobs domestically as a result. Meanwhile, low-wage jobs are created elsewhere which increases income and creates a market for the products long term there. We get less expensive iPhones at a faster evolutionary pace, we get more higher end jobs, our developers reach a larger market, and China gets a rising economic class.

            My original point though was even if one disagrees with that as a strategy/philosophy, disrupting things now that this has all been established would be catastrophic.

            Trump’s threat of tariffs risks disrupting all of this in a way that could negatively impact Apple in a major way even if Trump isn’t targeting Apple itself.

      2. Literally every company that makes anything or sells anything “takes advantage of CHEAP labor”. That’s why the textile industry in New England, mostly around Fall River, MA, went south, before going overseas. Remember when Walmart used to advertise the US flag on everything? No, it’s been a long, long time since they used to do that, because they forced all of their suppliers to manufacture in China, so they could squeeze a few more pennies out of their cost. While you constantly attack Apple, just one company, Walmart spearheaded the charge to force US manufacturing to China, because they sell everything, and they were the most powerful buyer in the World. Where’s your outrage?

        As for Apple, they require thousands of manufacturing engineers. Since US manufacturing has been gutted, manufacturing engineers are in short supply. It’s not that simple to manufacture in the US, when the labor supply in manufacturing engineers is missing. That’s why only a couple days ago, when Foxconn announced their new HQ in Milwaukee, they also announced a program with U of Wisconsin to send engineering students to Taiwan.

        1. I am OUTRAGED that manufacturing jobs have been leaving the U.S. since the 1960s for cheap labor. Fast forward to today and Apple is the biggest offender. Truth hurts sometimes …

            1. Correction: I did not mean to state Apple shipped jobs out of the U.S., my bad. My point is they are the biggest creator employer of cheap labor in China and probably elsewhere in foreign countries. Labor and jobs we all prefer to be in Apple country, but I understand the obstacles. Thanks all for the comments …

        2. If truth hurts, GeoB is hilariously happy.

          As KenC pointed out above, Apple has NEVER moved a single manufacturing job out of the US. On the contrary, it directly employs 100,000 more Americans today than it did in 2007. The Apple ecosystem of suppliers, developers, and accessories has generated far more direct American employment than that.

          Every direct job has probably generated at least two or three more indirect American jobs (people who sell housing, food, clothing, utilities, services, etc. to Apple employees and those who work elsewhere in the ecosystem). Most of the people with direct or indirect jobs have families, so we are now talking about well over a million Americans who have Apple-generated incomes today who did not in 2007.

          So how can Apple be “the biggest offender?”

          Since the truth hurts, perhaps the Trump camp could bottle his cure for the truth to solve the opioid crisis.

          1. I’ve told you this several times before, obviously tone deaf, once you put words in my mouth I STOP READING your post, right there. I don’t want to nor waste my time debating extrapolated CONCLUSIONS AND LIES …

          2. No, you don’t want to defend your own assertions. Simple question: how is Apple the “biggest offender” (your words, not mine) at moving jobs overseas when it has created hundreds of thousands of American jobs?

  3. Well Trump’s saber rattling is pretty much an empty disruptive gesture. (See ZTE.) Except when it isn’t. (See tariffs on Canada, Mexico, EU.) He’s a clueless dotard trapped in a 70s/80s world view. He’s leading us into the shitter…Fortunately, more and more know that. Impeached, Resigned, Disgraced. (His epitaph.)

  4. I imagine that no tariffs on Trump or Ivanka branded Chinese goods will be levied (unless the Chinese somehow target those products – which I doubt, since they seem to prefer to use carrots rather than sticks when it comes to the President and his family businesses. Case in point: huge loan for Trump project and trademarks for Ivanka, followed by the President’s reversal on ZTE, a TRUE national security threat, unlike Canada and our other allies). To quote the President: “Sad.”

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