U.S. President Donald Trump on Wednesday announced a pause to some of the big tariffs that he had put in place earlier in the day, and he spoke to the press at the White House, offering up comments that could prove to be a positive for Apple.
When asked whether he would consider exempting some U.S. companies from the tariffs in the future, Trump said that he would. “As time goes by, we’re going to take a look at it,” he said. “There are some that by the nature of the company get hit a little bit harder, and we’ll take a look at that,” he added, claiming that he will “show a little flexibility.”
Apple CEO Tim Cook had been successful in getting Trump to exempt the device maker from the tariffs he put in place during his first term, although Cook hasn’t been successful in doing so in this round of tariffs. Trump has not yet exempted any company from the tariffs.
Trump’s announcement of the tariffs last week put the stock market in free fall, with Apple shares plunging in value by 20%. The President’s comments on Wednesday helped the market gain back some of those losses, with Apple closing at nearly $200 a share, after opening the trading day at $172.
Trump announced a 90-day pause on all of the special “reciprocal” tariffs that were in place, such as the 46 percent tariff on Vietnam and the 32 percent tariff on Taiwan. However, the 90-day stay does not apply to goods shipped in from China. Trump raised tariffs on China to 125%, effective immediately. He said that he put the other tariffs on hold because “people were getting a little queasy.”
Trump emphasized his aim of bringing manufacturing back inside U.S. borders. He said Apple’s “building” in China was not sustainable.
If you look at Apple, Apple is going to spend $500 billion building a plant. They wouldn’t be doing that if I didn’t do this. They’d just keep building them in China. And that’s unsustainable.
While Trump may believe Apple could move production back home to the U.S., Apple’s complex supply chain would also need to be moved back to the States, meaning Apple will still face higher costs, due to the price of labor and benefits in the U.S. Then there is the question as to whether workers in the U.S. have the needed skillset to perform the needed jobs.
Apple will need to pay a 125% tariff on all iPhones, iPads, Macs, and other devices and accessories being brought into the United States from China. However, it can help mitigate the impact of the tariffs by importing devices from other countries like India, Taiwan, and Vietnam at the lower 10% rate.
