President Donald Trump said Apple CEO Tim Cook voiced concerns about competitors gaining an advantage because its products, unlike Apple’s, won’t be subject to tariffs when imported by the U.S.
Jennifer Jacobs and Mark Gurman report for Bloomberg News:
Cook and Trump had dinner on Friday night, while the president was at his golf club in Bedminster, New Jersey. Trump described the conversation to reporters as he prepared to travel back to Washington.
Trump said Cook made a “good case” about the difficulty in competing with Samsung if Apple products are subject to import tariffs. “I thought he made a very compelling argument.”
Apple will be hit by tariffs because it makes the majority of its devices in China before importing them to the U.S. and other parts of the world.Samsung, however, builds its products across several countries, including Vietnam and South Korea in addition to China. That means their tariff impact will be far less than the impact to Cupertino, California-based Apple.
MacDailyNews Take: Apple has a $210.6 billion sponge that is more than capable of absorbing any short term “competitive advantage” that might occur (as many prominent analysts, including Ming-Chi Kuo, have noted) in order to help stop their hard-earned IP from being pilfered daily, to say nothing of addressing obvious trade imbalances. Apple could set up cannons that fire hundred dollar bills every minute, never turn them off, and never even notice they were on. Apple could also better diversify their supply chain in order to reduce their dependence on a single country, dispersing their eggs into many baskets in order to mitigate risk from everything to economic headwinds, war, strikes, natural disasters, etc.
As CEO, Cook is doing his job by attempting to maximize shareholder value, but critics may say that Cook’s Apple was designed and built to profit from the China situation (cheap labor and unbalanced trade agreements) and now doesn’t want to part with any portion of the massive bank roll they built up to help with issues Cook himself has already admitted to be problematic.
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
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
At least half of the popular fallacies about economics come from assuming that economic activity is a zero-sum game, in which what is gained by someone is lost by someone else. But transactions would not continue unless both sides gained, whether in international trade, employment, or renting an apartment. — Thomas Sowell, June 14, 2006
[Thanks to MacDailyNews Readers “Fred Mertz” and “Arline M.” for the heads up.]
And what about the American consumer?
Apple analyst Ming-Chi Kuo believes believes that Apple has prepared for the event given guidance by Cook, and should the 10% tariffs be supplied “Apple will absorb most of the additional costs due to tariffs, and the prices of hardware products and shipment forecasts for the U.S. market will remain unchanged.”
There would be a negative impact on profits should Apple shoulder the cost increases, according to Kuo. He also believes that some of the impact will be mitigated over time by Apple’s shift to non-Chinese production sources, such as expansion in India, or production in Vietnam.
Donny boy talks a good talk but quite frankly he doesn’t really give 2 shits about the American consumer. He is stuck in megalomaniac mode and that won’t change. Quite frankly, if he loses next year, it might take the military to drag him out of the White house. You think I’m kidding. I’m not.
Over on Faux News, the sheep are attacking Apple for building stuff in China. They claim they will boycott overpriced Apple stuff and buy Samsung instead. They obviously don’t know anything about Samsung. You really have to wonder if they are playing with a full deck if they think it is patriotic to reward IP thief Samsung, a Korean company, in order to spite a US corporation. Would they be happier if Apple assembled iPhones in Taiwan using its existing Chinese parts suppliers? None of them seem willing to work a mind numbing assembly line 10 hours per day for $5 per hour as Timmy and every other US corporation demands.
They retweet their leader’s pathetic attack on Mercedes Benz, not knowing that many Benz models are assembled in the USA. So apparently label is more important than fact, partisan attacking more important than looking out for every single American in every state and, yes, those US territories that bring the total number of US entities above 50.
Literally some alt right dickwads have trotted out this justification for their ridiculous propaganda: they claim Apple is not American. Anything from California they claim is communist or socialist or whatever and therefore should sink into the sea.
How stupid are these backstabbing fact-free MAGAts? Don’t tell them that their ammo stockpiles are are also made in China, and without liberals they wouldn’t be able to communicate outside of their campfire circles at all.
Some time back I already said that Samsung etc will laugh if tariffs hit Apple.
And what does ‘make’ mean in ” makes the majority of its devices in China ”
Assemble would be a better word.
Apple components are made all over from USA, Europe , Japan , Korea etc. Processors like ‘A’ chips , OLED screens , Gorilla Glass, etc are not Chinese. These are assembled in China. Some estimate the Chinese parts contribution to an iPhone might be as low as 10% of the cost. Foxconn’s assembly costs is about $5 a phone.
Meanwhile Korea makes parts all over just like Apple including China, It assembles in China, Korea and other countries. Samsung actually has many factories in China.
For tariffs it shouldn’t matter if it was ‘made’ or ‘assembled’. If it is being imported from the specified country it is subject to the tariff. Making exceptions totally defeats the purpose of having one in the first place, and creates more paperwork/makework in the supply chain that further raise costs.
so if samsung makes all its parts in China and does the final assembly in Korea its ok? No tariffs? Samsung like I said has many factories in China.
Chinese companies like Xiaomi can set up can set up an assembly factory in Korea
if tariffs are absolutely needed More sensible to tariff on the percentage which is Chinese parts and perhaps labour costs. I.e the total cost of the phone minus parts like USA made batteries, ‘A’ chips, USA glass , modems , power controllers etc.
Companies can submit a parts list.
I’ve said over and over Chinese issues like IP theft etc need to be dealt with and ignored by too long which Cook agrees but strategy as he’s pointing out needs refinement.
This is not a partisan argument on my part, just practical,
Unless you are suggesting the US tax office deal with a Qualcomm-like situation of taxing the entire product based on a portion being sourced from China it probably would not be practical. This is especially difficult with Apple being secretive about the prices they pay for their components.
If we have learned nothing else, it is one believes this president at one’s own peril. Tim needs to keep talking to this guy because his position will change with the last person he speaks with, or if he feels a decision makes him look “weak.” There is no thought or coherence to anything he does other than self aggrandizement.
I just wish Apple would point one of those five-hundred-dollar cannons at me.
This is such a great story the president reaching out and even giving credit to Tim’s ideas.
And yet multiple partisan pea brain posts fail to see the good, denigrate the president and post partisan HATE. You know who you are.
It is what it is…