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.]