‘The risk paid off’: How Apple prevailed in the U.S.-China trade war

“As the Trump administration sends signals about a potential trade deal with Beijing, one iconic American company is poised to emerge from the bruising conflict in a better position than most: Apple,” Steven Overly, Margaret Harding McGill, and Celia Chen write for Politico. “Under CEO Tim Cook, Apple has kept its China-manufactured iPhones off the list of Chinese imports that Trump has slapped with roughly $250 billion in tariffs. That puts the Cupertino, Calif.-based electronics giant in an enviable position compared with other sectors caught in the crossfire — thanks in part to efforts by the soft-spoken, 58-year-old Cook to cultivate leaders in both countries.”

“‘Among the tech titans, he’s probably the one who is best placed to deal with both sides at the same time,’ said James Lewis, a former State and Commerce department official who dealt with China trade issues and now directs the technology policy program at the Center for Strategic and International Studies,” Overly, McGill, and Chen write. “Apple, he said, is respected in the U.S. as one of the country’s most valuable companies, and is viewed in China as being more ‘impartial’ and ‘independent’ than other American firms.”

“Cook’s finesse in navigating the divide was tested as never before in January when Apple lowered its quarterly revenue projections, in part due to the softening of the Chinese economy after Trump levied his sanctions,” Overly, McGill, and Chen write.Cook told investors at the time that ‘macroeconomic factors will come and go’ but said he manages Apple for the long term.”

“Cook has approached the White House in a number of ways, from talking trade with Trump in the Oval Office last April to dining with the president and first lady Melania Trump in August at Trump’s golf course in Bedminster, N.J. He maintains frequent contact with White House officials like economic adviser Larry Kudlow, and joined the president’s daughter Ivanka Trump on a visit to an Idaho schoolroom in November to highlight technology in education,” Overly, McGill, and Chen write. “Cook has been equally active in working the Chinese side. During a four-day trip to China in October, the Apple CEO’s itinerary included a meeting with Li Qiang, secretary of the Chinese Communist party in Shanghai. Then in Beijing, he was one of several U.S. business leaders to shake hands with Chinese Vice President Wang Qishan on the sidelines of an advisory board meeting for Tsinghua University’s business school.”

Read more in the full article here.

MacDailyNews Take: It’s a high-wire balancing act that Tim is navigating, for sure!

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:
President Trump says U.S.-China trade deal ‘very, very close,’ pushes U.S. stocks higher – February 25, 2019
Apple CEO Tim Cook optimistic about U.S.-China trade talks – February 12, 2019
President Trump says U.S. doing well in trade negotiations with China – January 23, 2019
China’s 2018 growth slows to 28-year low, more stimulus seen – January 22, 2019
Apple CEO Tim Cook: I’m very optimistic about U.S.-China trade talks – January 8, 2019
Advisor to President Trump: Apple’s sales should pick up when U.S.-China strike trade deal – January 3, 2019

[Thanks to MacDailyNews Readers “Fred Mertz” and “Sherif Laoun” for the heads up.]

19 Comments

  1. So let’s get this straight: US manufacturing is dealing with a 25% increase in the price of metals and this idiot reporter is declaring a trade victory because this corrupt administration picked Apple for its special exemption list? Apple, the company that makes almost everything in China??????

    I miss the days when republicans wanted government out of the way. Today they just want to pick winners and losers. You can bet that Mnuchin, Ross, and Trump hold stock in the special exempt tariff avoiding companies.

    1. “Apple, the company that makes almost everything in China??????”

      and almost all Apple’s MONEY from overseas sales (two thirds of Apple’s profits) comes back to USA. Apple is USA’s biggest tax payer. China’s assembly costs per iPhone is estimated only to be about less than $5 each (Some processors are designed by Apple and manufactured in Texas, some glass comes from Corning, screens from Korea and Japan, modems from Intel, Apple even sources some of the metals themselves overseas in Africa etc)

      In exchange for some assembly profits to China, Apple gets access to the China market. Most years Apple makes almost as much money in China as the WHOLE of EUROPE. (20+ % of profits).

      At the start of the ‘trade war’ some Americans (like you are saying now) said ‘USA should punish China by putting tariffs on Apple’ and China was saying ‘China should punish USA by boycotting Apple’ (because Apple is USA largest taxpayer). So all this makes sense to you ? BOTH sides attack Apple ?

      1. Sadly Apple, FaceBook, Google, Amazon etc hold the US cirizens hostage by withholding paying their taxes unless and until they get a MASSIVE discount. Can nurses, teachers, cops, doctors, cleaners, etc do the same? Withhold their taxes for years until they get a rebate?

        1. if apple and their employees didn’t make money, Government workers won’t have any monies at all as they all come form taxes.

          Government workers today are practically the only people with full pensions. The rest of us have to work to over 70s -80s to make enough.

          If Governments stop wasteful spending — how many giant government mega projects are found to be wasteful, many cancelled after wasting billions – we’ll get double the services with half the taxes. Fiscal responsibility not crazy over taxation. Income tax, state tax, sales tax, gas tax, municipal tax, inheritance tax, tolls, levies, tariffs etc etc etc. ENOUGH!!!

          As a corporate employee and investor I’m freaking tired with the new culture of entitlement and the crazy belief in the nanny state. Destroy corporations and you will have no tax dollars How did socialism “ we’ll provide everything” Nicaragua government turn out? Go live in Nicaragua if you want govt. socalism paradise.

          1. teachers…

            f—k i know a government manager who retired in his late 40s with a full pension. He told me he was going to live by the ocean and take up photography. He will get a tax free pension forever with health benefits — and today many people live to 90 plus.

            Beat cops in my area with overtime make over 100k a year. overtime at double pay for rock concerts, sports events they told me are very lucrative. 40% of the cops in my town of 80,000 make that or more according to the press PLUS full benefits. AND in a small town there’s practically no violent crime, only gunfight was 5 years ago.

            don’t give me the crybaby stories about government workers

            1. Funny how your anecdotes don’t align with any reputable statistics on incomes in the public sector. The #1 reason most professionals choose not to work in the public sector, at least until their kids are out of college and their retirement savings well in hand, is because public sector work doesn’t make as much money as private enterprises.

              When you cite how horribly overpaid some police officers might make, did you bother to ask how much overtime they had to work? How much training is required? What risk level they encounter?

              Also, if public services are so horrible to you, then why do you chant “support our troops”, most of whom have done practically nothing to protect US soil. Seems to me the rabid right wants it both ways: a massive military without paying for it. Then the paranoia from Trump supporters is unbelievable. Why do you want the highest spending administration in history to spend your money building a PARTIAL wall that will not seal the border no matter how you analyze Trump’s wacko math.

              Admit it, you have never witnessed a city council meeting let alone balanced a complex budget. But you think a multi bankruptcy biz failure is fixing the government by “drowning it in a bathtub “. Sure.

              Why don’t you stick to your principles. Don’t drink municipal water or drive public roads, don’t educate yourself at a public library, don’t call the fire department when a firestorm takes out your neighborhood, and don’t call FEMA when a tornado flattens your trailer park. You hate paying taxes required to be a “Great” nation, so go ahead and man up, Mr. Libertarian. We don’t need you either.

            2. @ Get a Clue

              ” have never witnessed a city council meeting let alone balanced a complex budget”

              I live in a liberal town. My City council wanted to GIVE OUT FREE BONG PIPES because they said crack smokers can communicate diseases by sharing bong pipes, so better give tax funded bong pipes out.

              My city council also put a motion to PROVIDE FREE LIQUOR in the homeless shelters because they said homeless people endangered their lives by drinking hair spray etc. They wanted taxpayers to fund social workers and medical staff to administer ‘shots of whiskey’ etc free in shelters, in “measured amounts ” ! The only reason the city council motion was cancelled was when one citizen pointed out ‘what is to stop the shelter people from drinking hairspray AFTER they drank all the ‘measured amounts of whiskey etc’.

              When a bunch of people refused to move into a shelter that had private rooms, wifi, free food, room cleaning because THEY COULD NOT CONSUME DRUGS (shelters had a no alcohol and drug rule) , my liberal council approved 50 million bucks to upgrade new shelters which they called ‘Low Barrier’ shelters where people can freely consume alcohol and drugs. Now police officers and paramedics are called in 4 times a day on average due to fights and overdoses and the city spends thousands for each resident for the police, paramedics, administrators and social workers and cleaners (to clean up after the people puke in their rooms) etc. We have municipal tax increases of over 30% in five years, over 100% if you take into account increase in tax assessments.

              Still want to talk more about city councils… ?

              I was an OUTSIDE CONTRACTOR for the GOVERNMENT ! . that’s why I knew about the government manager who retired in his 40s with full pension as I worked with him for years. No stress for government workers, I never saw one get fired no matter how screwed up they were. And some of the mistakes they made would curdle your brain.

              When STEVE JOBS said that our children were a precious resource and complained that incompetent teachers weren’t fired , he was asked to apologize by the Teachers Union.

          2. From a recently retired federal employee:
            “Government workers today are practically the only people with full pensions”
            Many many years ago most private sector employers had defined pensions. Join a Union and fight to get them back.

            “If Governments stop wasteful spending…….wasting billions”
            You apparently do not see the 800 pound gorilla in the room—the Military Industrial Complex. Even bone spur deferred tRUMP spoke about wasting TRILLIONS fighting endless unwinnable wars.

            “As a corporate employee and investor I’m freaking tired with the new culture of entitlement and the crazy belief in the nanny state.”
            I suspect you would love to have one of those “nanny state” jobs with excellent salary, pension & job security.

            1. I give ONE example of all the fallacious thinking I’m confronted with :

              You say “You apparently do not see the 800 pound gorilla in the room—the Military Industrial Complex” and “Get A Clue ‘ saying ” Seems to me the rabid right wants it both ways: a massive military without paying for it”, what makes you all think I advocate crazy military spending? That is just a stupid, automatically assuming that anyone who just wants common sense and fiscal responsibility is some sort of conservative neo nazi warmonger?

              I’m social liberal, gays, minorities don’t bother me, and i Advocate peace (its Cheaper ), Just because I’m for FISCAL RESPONSIBILITY, that means i’m conservative? God are you all saying there are NO liberal minded people who believe in fiscal responsibility in dealing with tax dollars? Liberals don’t care that tax dollars are used wisely? Is that what you are getting at… ???!! That’s kinda of sad.

            2. you say : “From a recently retired federal employee”

              “federal employee” please note that all your pensions and benefits come from corporations. Government pension funds invest tax dollars in aapl stocks etc.

              (The florida Teachers pension plan even invests in Assault gun manufacturers… ! And note as I said above I’m a social liberal, I’m not really advocating this, just pointing this out.. )

              If over taxation, trade war causes a massive collapse of the economy like in Greece, Nicaragua expect cutbacks in government benefits even to pensioners.

              Euractiv:
              “Athens agreed two years ago to cut pensions in 2019, in an attempt to placate lenders and get the International Monetary Fund (IMF) to back a third financial bailout the country clinched with its euro zone partners in 2015.”

              Screw with corporations and economy and maybe watch your pensions cut, then I wonder what you ‘we hate corporations’ guys will say.

          3. Overtaxed (notwithstanding that your taxes are lower than at any time in decades) . … Quiz me this:

            Given two theoretical scenarios, which would you choose?

            A: a healthcare system entirely driven by profit with no government oversight or regulation or senior benefits. The largest corporations will have ultimate power to decide what illnesses are profitable to treat, and will let all unprofitable patients die.

            B: a healthcare system where a democratically elected government puts restrictions on corporations so that as a minimum, everyone gets emergency care and a minimum standard of preventive medicine. This government would require corporations to demonstrate that their products actually work before selling them. This government would offer AS AN OPTION a nonprofit basic health insurance for all citizens, not just needy seniors currently relying on Medicare. Anyone who wants to buy Cadillac health care plans are welcome to do so, and anyone can enjoy medical tourism if you want. Massive plagues are avoided because everyone is properly immunized even if they are too stupid and cheap to want to do it. If what the government does isn’t to your liking, you get to elect new representatives who are supposed to reform stuff that doesn’t work as well as the MAJORITY OF CITIZENS desire. Corporate profits are sacrificed for the public good and the isolationist anti-science whiners would have to accept the democratic process.

            Oh, here’s the kicker: in the industrialized world, option B saves money for citizens and as anyone who looks at health knows, it results in a more healthy citizenry. Look at quality of life in the USA in 1919, right after the worldwide influenza epidemic, to see how option A worked then. Then if you think you don’t need any regulation to ensure health for all, read The Jungle.

            1. you guys have fallacious straw man arguments. you pick a point like the guy above about : “do you want clean water” etc and stretch it to mean ALL government spending is wise.

              Say I agree with whatever you’re talking about healthcare, does that mean that my arguement that we are overtaxed because a lot of government spending is unwise?

              So you think New York City equipping it’s police force with 40,000 Windows Phones when the platform was dying and then replacing them 2 years later with IPhones was wise spending?

              I never said that ALL government spending is for bad purposes, I’m saying there is a lot of incompetence in how the government is run with regards to finances, go read any Government finance audit. You will see contracts given without proper bidding, projects costing billions abandoned.

              I was very clear in my first post that my core argument is that we’re overtaxed unnecessarily and we could get twice the services for half the spending (see I NEVER said NO SPENDING AT ALL, go read my post) if government was more competent.

              like i said I was Government Contractor. Have a Govt. health system and don’t supervise and audit it properly and people like me will be charging $3.50 per band aid ( or sell you some Windows Phones). There are tens of thousands of government contracts given out, did you read the Audit of even one of them?

              Here is a real, not theoretical example because I was working with Social Services. There was one group home for foster kids, I met the manager, who charged the Goverment $500 – $800 a month per child for clothing expenses (and this was like 15 years ago) because the manager knew the social worker in charge and each contract was written separately and have ‘conditional ‘ expenses. The manager pocketed thousands every month, as clothing was just one item. Note all this was above the tens of thousands she got for ‘normal’ standard fees. She bought several houses. She finally lost the contract after years when a new state Govt. took over and standardized contracts ( ie limit to clothing per month).

              But this is nothing, go look at the real big fish like building roads, bridges, military weapons etc. How many people ever question why a stretch of road costs $2 million to fix and not 1.75 million?

              but i know it’s no point to talk sense.

            2. typo

              “Say I agree with whatever you’re talking about healthcare, does that mean that my arguement that we are overtaxed because a lot of government spending is unwise?”

              should be “Say I agree with whatever you’re talking about healthcare, does that mean that my arguement that we are overtaxed because a lot of government spending is unwise is wrong?”

      2. Yes. Because Apple outsourcing to the max like every other US corporation is the reason that low skilled workers in the US are going beserk. There are no full time, full benefit manufacturing jobs to speak of. Cook gives himself €120 million and Apple retail employees get a half step above Walmart style compensation.

        If the Chinaman who assembled your iPhone cannot justify the cost of buying one for himself, then Apple is just as much to blame for its labor exploitation as any other sweatshop.

        What is the answer? underworked undereducated US citizens will not all become doctors or lawyers, they will scapegoat others and rally around the next Mussolini. China will never honor IP protections as it one by one eats the western companies that thought they could profit endlessly from cheap labor. Now these companies are owned by the Chinese companies that stole designs from them. The response by the US prez is to jack up tariffs, which are taxes on US consumers.

        America, already in debt over its head and totally politically gridlocked, will be owned by the commies in another couple generations if the US doesn’t start acting on behalf of citizens over the self serving interests of the billionaire classes that currently run everything. Cook is one of these self serving asshats.

  2. it’s impossible to do at this point… Apple should have gone private when Steve passed.

    if that happened, you’d see Wall Street also crying from not having the most manipulated tech stock. for the revenue and profits it generates, it’s amazing how undervalued AAPL is…

    i used to own it, maybe that is why i would love Apple to go private… spend those buy backs/dividends on matching or surpassing Samsung in display tech and Google/Amazon in the AI space…. while still challenging Netflix on content…

    So many hate on Apple… yet those same haters benefit from the vision/solutions from that very company

  3. @overtaxed

    You still don’t get it. Why would the International Monetary Fund (IMF) loan countries billions they know will be unable to repay? After the planned default, 3rd party proxies (corporations) buy the countries assets (ports, electric & water utilities, etc) for pennies on the dollar. The IMF is a subsidiary of Wall Street, a legal global loan shark, using the U.S. military as its enforcer.

    1. you guys are not even understanding what i’m saying. where in the world am I endorsing the IMF? i’m saying that if countries don’t watch their finances than all kinds of shift will happen. You are actually reinforcing whatvI’m saying.

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