Bridgette Webb for Yahoo Finance:
Apple announced Monday that it will make its new Mac Pros computers at its Austin, Texas facility, thanks to some tariff exemptions on components that are used to make the computers.
It’s a move that Loup Ventures Managing Partner Gene Munster says is important for investors to watch. ”Apple is doing an effective job at managing this balance between giving some things to the [Trump] administration and getting some things in terms of some breaks on the tariffs,” Munster said in an interview with Yahoo Finance’s On The Move…
“I believe that this news means it meaningfully declines the probability that the iPhone will be tariffed in December,” Munster said. “I’m surprised the stock didn’t react more positively on this news.”
MacDailyNews Take: Obviously, Apple’s goal is to Make Mac Pro Great Again.
See Munster’s full statements in the video here.
Well good.
+1
Another big win for American workers. And Texas. And Trump.
I’m not tired of winning. Trump 2020.
Impeach.
Lest you forget, Apple had already built manufacturing facilities in the U.S. to build the previous Mac Pro – the trash can. That investment *predates* Trump.
The fact that Trump had to approve waivers on components so that Apple could continue to pursue repatriation of high tech manufacturing to the U.S. just shows the flaws in Trump’s process. I am sure that Trump will take credit for this result. He has a habit of intentionally and erroneously taking credit for events that he believes make him look good. And taking credit for issuing a few waivers on tariffs that he created is not exactly an overwhelming endorsement.
The ballooning deficit is Trump’s gift to America. It is the same gift that we received from Reagan and W Bush. Reagan and W Bush also gifted us with terrible economic crashes about six years after the tax cuts. Trump’s great recession may arrive even sooner than that. Tax cut and spend is a terrible economic policy and the poor and middle class will pay most of the price when the economy tanks, as usual.
Little overlooked fact. Reagan’s Tax cuts boosted the economy and brought in more tax revenue. The problem is the Democratic Congress never followed through with the promised spending cuts. The Reagan Economy made us money, but not as fast as the Democratic Congress could spend it.
The “terrible economic crash” after Reagan (happened during Bush I) was relatively mild, and in fact had ended before Clinton was elected. The only reason Clinton’s economy did so well was 1) He had the gift from Reagan of the Cold War Peace dividend, and 2) Newt Gingrich and the Republicans in Congress kept Bill on track.
As far as the crash during Bush II, the democrats share plenty of the blame for all he money and crazy lending practices they forced upon the industry. They helped turn good renters into lousy home owners.
There are very few things the government does well, and never economically. Therefore it should limit itself to those things it has to do/ no one else can do.
I repeat, GOP “tax cut and spend” policies. The Reagan, W. Bush and Trump Administrations enjoyed full control of the Federal government, yet failed to cut spending when they cut taxes. Instead, they chose to raise significantly defense spending and avoid tough spending decisions in other areas.
Bush the Elder was a gentleman and a statesman and the last true Republican in the office. He understood compromise and he understood sacrifice for the greater good of this country. In contrast, Trump will trash anyone who fails to please him, even a war hero like John McCain, a person for whom I have great respect even when I differed with his legislative choices.
I love the GOP strategy of unloading blame on others or, at the very least, “sharing” blame when it is not possible to offload all of it. I repeat, full control of the Federal government followed by tax cuts and massive spending increases. You can try to spin it, but not with any credibility
Why are you cheering that Reagan took more money from you and not the billionaires and corporations that don’t even know what to do with all their excess Cayman Islands cash?
This forum isn’t a very good place to discuss tax policy. It’s way more complicated than what you presented. First of all, tax policy doesn’t work in a vacuum, fiscal policy went a long way to finally whip the late 70’s stagflation. It wasn’t the modest income tax cuts that spurred economic recovery, it was dramatically lowered interest rates. As a % of GDP, federal revenues under Reagan barely budged.
As everyone should know, top marginal income tax rate is only one teensy tiny small piece in a very complicated game. Back in the 1980’s, income taxes were only about 25% of total federal revenue. What about the rest? After Reagan moderately trimmed marginal income tax rates in 1981, he also triggered a small recession, raised other taxes (such as the gasoline tax), tinkered with loopholes, raised more taxes … it’s very complicated.
A huge untold story that Reagan afficianados often forget is that Reagan jacked up certain corporate taxes massively in 1984 to pay for his increases in government programs. This stabilized the budget from the loss in revenue from the 1981 income tax trim and ended the 1982-1983 malaise. People got through it, but anyone who lived it knows that the early 1980’s were not boom years. But predictably the federal cash burn eventually built steam.
The economy continued to gain from fiscal stimulus thanks to federal spending increases — as a % of GDP, Reagan spent 2% more than the prior 40 year average – that’s HUGE. That’s yuuuge. So everyone was partying right? Normally one would think all that such massive spending would make its way to the low classes. Nope. Real wages plummeted 8%. Reagan actually increased unemployment numbers despite big deficit spending, notably on military boondoggles and foreign nationbuilding adventures. Rich got richer, poor got much poorer, Trump partied with whatever p_ssy he could grab. GDP climbed if you owned Military Industrial Complex stock.
In the Reagan years trade went wonky too, further hurting working classes. Let’s be clear: tax cuts did not trickle down. Under Reagan’s nose, Tricky Dick’s trade agreement with China accelerated corporate outsourcing dramatically. From 1981 to 1983, despite income tax cut, unemployment shot up from 7.3% to 10.7% The percent decline in real income among the working classes was dramatic while the top 20% earners pocketed more money. That was a huge shift in wealth. Reagan also screwed wage earners by tinkering with social security taxes in 1983 as well as several other tax increases in the 1984 and 1985 omnibus budget reconciliation acts. Again, too complicated for this forum.
All in all, the Reagan’s tax increases elsewhere offset the modest income tax cut that made Reagan forever popular. GDP did grow but the gains were mainly captured by the top wealthy class. But that’s only half the equation. What is unforgivable is that the old Gipper spent like a drunken sailor. Another little fact that the selective memory Laffer Curve fans fail to report. Endless tax cuts to find a Laffer peak are entirely fruitless if you’re digging a debt hole that will not be paid off in several generations, if ever. Your kids will have to pay back the debt with interest.
Which brings us to 1988. Don’t forget the rest of the story after Reagan left. Reagan’s successors H.W. Bush and Billy Clinton (pretty good presidents actually) both slashed Reagan’s reckless spending. They didn’t have much choice, the budget deficits were out of control. Bush famously had to increase taxes and Dana Carvey thus became one of the all-time greats on SNL. Following the 1993 tax increase, revenues continued to climb and Clinton actually ran a couple years of budget surpluses without any major tax cuts.
Apple (this is an Apple site, right?) blew their Mac lead and handed Microsoft the booming PC industry by 1995. So to save Apple what did Jobs do? Did he go to Clinton and ask for tax cuts? No. Jobs was ordered by the board to step aside, that professional management was needed (and it was). But that professional management, including Compaq hires like Cookie, ran the numbers and decided that better products were not the answer. Outsourcing to Asia was the way to save money. Cookie hasn’t stopped since. Tax rate was irrelevant when the income ratio is so great. That hasn’t changed enough to matter since then.
One last thought: Dubya Bush was an unmitigated economic disaster no matter how anyone tries to justify it. Spending was out of control and to make matters worse, Dubya thought he too could goose the economy with corporate tax cuts. From 2005 to 2008, federal revenue from corporations dropped over 50% per year. Veterans coming back from offensive overseas wars were paid in IOUs. Tax revenues dropped from individuals too, but much less.
Yet some here blame Obama for the fact that in 2009 federal income had dried up and millions were literally being evicted from homes that fat cat bankers told them they could afford. He certainly didn’t get any cooperative help from Moscow Mitch, that’s certain.
You would defend Lyin’ Don, who has done nothing but golf and throw US trade into chaos. Selective exemptions to waffling tariffs (consumer taxes) is cronyism and should be illegal.
You may want to ask Apple if all Mac Pros will be made in TX or merely the ones destined for American customers before you hold your GOP fundraiser party in Austin.
They’re not Making Mac Pro’s in America, Their “Assembling” Them here. The cases are made overseas, the parts come from China, Taiwan, Vietnam, ect. The Cpu’s probably come from here, Otherwise it’s misinformation. Like an American Car, it’s only assembled here. The parts come from all over the place. If Apple would sell a i7 Mac Pro at a decent proce like $2k They would sell more computers, will they? no. Eventhough the cost for the parts would be around $800.
If you look, you can find articles where Apple describes the components sourced in the USA vs overseas. Obviously, no company can practically make computers in 2019 with components sourced solely within the USA. The list of US components is better than you imply, and a lot better than completely manufactured in Asia. Remember, the perfect is the enemy of the good. This is good news, and an improvement over the status quo.
FWIW, I was surprised to see that the CNC-drilled case was one of the items which received an exemption.
That particular example is purely about cost, and cost alone.
It will be a darn shame if only Apple is forced to do assembly of the Mac Pro in America and other companies are allowed to have everything done overseas. It doesn’t seem quite fair to me if they’re only going to single out one company. Apple really needs to get the new Mac Pro right on track as it looks as though it has a very good chance of succeeding.
Why is there a surprise Apple stock didn’t react more positively today on December iPhone tariffs? Most of the market, in general, took a hit. At least the tech stocks that I follow were down.
If they’re going to make (or assemble or do whatever portion of the work) any Macs here, this is the logical one.
The Mac Pro is the least price-sensitive SKU in the whole Apple product-verse, so if it goes up $50 or $100 over time, it’ll be a rounding error in the budget of the pros and production houses who aregoing to buy, configure and deploy it.
The tariffs have nothing to do with it. They already had the existing facility to assemble Mac Pro’s here in Austin and simply nothing is going to change except the new Mac Pro and the assembly infrastructure. Moving on…
If the tariffs on Mac Pro components had gone into effect, that would most certainly have affected the decision whether to continue assembling them in Austin.
Price of the Mac Pro and new display now make a lot more sense. The so-called Apple Tax is now actually a combination of tariff contributions and increased production costs, rather than just Apple charging a premium for its cache and design sense.
Makes no sense a 11,000 dollar computer can’t be made in America, a Porsche Taycan is made in Stuttgart , Germany not some back water hellhole (note Tesla is building a factory in China thru Chinese vassal’s they well replace Fremont in time).
Start making them already!
I’m waiting!