Apple CEO Tim Cook has done an awful lot of schmoozing with Donald Trump, and to date he’s gotten a lot of out his dance with the devil. Cook has along with other titans of industry sought huge corporate tax cuts, which Trump was more than happy to sign late last year. That helped Apple avoid $50 billion in taxes, enabling its gluttonous stock buyback. Cook also reportedly secured some kind of commitment that iPhones assembled overseas won’t be subject to tariffs in Trump’s brimming trade war with China.
Well, Cook may have come out ahead on taxes, but it looks like Trump is preparing to dig a knife deep into his back on tariffs. This week, Apple said in a regulatory filing that the tariffs could drive up the cost of various products (and/or their components) by 25 percent, saying that $200 billion in proposed tariffs would hurt the U.S. much more than China. Apple didn’t include the iPhone on that list, possibly because of the promised immunity for that specific product, but it did include products like AirPods, Apple Watch, Mac Mini, and others. Yet as noted by the Washington Post, on Friday Trump threatened an additional $267 billion in tariffs that “could cover virtually all Chinese-made goods entering the United States.”
That means the iPhone exemption could potentially be off the table, and Trump does not seem happy that Apple wasn’t staying quiet. On Saturday, Trump acknowledged how many Apple products could be subject to tariffs but proposed an “easy solution”: If the company moves its production chain stateside, “there would be ZERO tax, and indeed a tax incentive.”
The Post wrote:
Apple declined to comment on the president’s tweet.
... The tariffs are top of mind for Apple chief executive Tim Cook, who has personally lobbied Trump for months on issues of taxes and trade, even dining with the president and first lady Melania Trump at Trump National Golf Course in Bedminster, N.J., last month. Cook’s personal diplomacy stands in stark contrast to some of his peers in the tech industry, who haven’t engaged Trump directly—and often are on the receiving end of far more aggressive tweets attacking their business practices.
It’s not clear what Trump means by “ZERO tax”—presumably he’s referring to the tariffs, though who knows, really. But that’s kind of beside the point: As the Verge noted, Apple moving its supply chain stateside would dramatically increase expenses to the point where it would far outstrip any tariff. Trump is shifting the goalposts again, creating a situation in which Apple (or Trump, for all he cares) cannot win. And he seems to be laying the groundwork for him to make the company into another of his numberless scapegoats in the future.
Apple will be fine. It’s a trillion-dollar company. But it looks an awful lot like that campaign-trail grudge is firing up again, and Trump is going to try to leave Cook and crew with the bag for all those empty promises that Apple will be shifting production stateside. Hope the food was good at those White House events, though!