When United States President Donald Trump hit goods imported from China with a 145% tariff, Apple CEO Tim Cook sprang into action, working to gain an exemption from said tariffs to keep the costs of iPhones and other imported Apple devices down.
According to a report by The Washington Post, Cook made a phone call with Commerce Secretary Howard Lutnick last week, to explain how the huge tariffs would cause iPhone prices to greatly increase. He was also careful not to make any negative public comments about Trump’s policies that might tick Trump off. Cook also had donated $1 million out of his own pocket for Trump’s inauguration.
Cook is apparently one smooth talking son of a gun, as last weekend, we saw Trump exempt Apple’s iPhone, Mac, Apple Watch, iPad, and other products from the lion’s share of tariffs he had put in place on Chinese goods.
While Cook was successful in getting a tariff exemption for Apple, the victory may be short lived. The day after Trump announced Apple’s exemption, he said that there was “no tariff exception” and that no one would be “getting off the hook.” Instead, Apple and other tech companies will be “moving to a different tariff bucket” as Trump and his administration will be “taking a look” at semiconductors and the electronics supply chain.
As you can imagine, the waffling on the tariffs has played havoc with Apple’s (AAPL) stock price, and it has fluctuated quite a bit over the last two weeks or so.
Trump could reinstate the high tariffs on Apple products to pressure Apple to manufacture the iPhone and its other product in the United States. However, Apple would still likely not do so, as it would need to cover the costs of building manufacturing facilities, training unskilled workers, and also paying those workers U.S. wages.
While Apple has pledged to invest half a billion dollars in the United States, that investment will only cover the costs of manufacturing Private Cloud Compute servers at a facility in Houston it will open in partnership with Foxconn. Those servers will be built in a much lower amount than the devices Apple makes outside of the U.S.
