There's still friction on the line between Donald Trump and Tim Cook. The latter had no trouble navigating the Cupertino ship through the twists and turns of Trump's first term, but things have clearly become more complicated since the start of the second. While the Apple CEO did secure an exemption from customs duties on smartphones and computers imported into the United States, nothing is stopping the White House tenant from returning to the fray on a whim.
Donald Trump dreams of an iPhone assembled in the United States
There have been other U-turns and U-turns since then, but the latest news is that imports are now taxed at a rate of 10% for almost all products imported into the United States, and 30% for Chinese products. This pause will only last until July, however. And Donald Trump continues to threaten other sectors of activity with exorbitant customs duties (some of which make little sense, like the 100% customs duties on foreign films).
There is one thing, however, on which the American president has not wavered: he wants to see factories expand in the United States. And in particular, factories producing iPhones. A prospect that makes no economic sense, unless the American consumer agrees to pay several hundred, or even thousands of dollars more for their smartphone.
During Apple's financial results presentation, Tim Cook estimated that the Trump tax would represent a $900 million shortfall in revenue in the second quarter. He also explained that the majority of iPhones sold in the United States were produced in India. This did not fall on deaf ears.
"I had a little problem with Tim Cook yesterday," Trump said in comments reported by CNBC. "I told him, 'My friend, I treated you very well. You come here with $500 billion, but now I hear you're building all over India.' I don't want you building in India." He's referring to the investment trumpeted by Apple in February, which actually includes a majority of projects already started under the Biden presidency. Donald Trump continued: "I told Tim, 'Look, Tim, we treated you really well, we tolerated all the factories you built in China for years, now you have to build here. We don't want you building in India, India can do it on its own... we want you to build here.'" He concluded by stating that Apple would increase its production in the United States, without going into details.
India, on the other hand, seems to be favored by the former president on the trade front. Donald Trump called it "one of the countries with the highest tariffs in the world," while assuring that an agreement was on the table to reduce these duties to zero on American imports. A way of justifying his annoyance at the outsourcing to this country.
Apple produces very little in the United States. There is indeed a line in Texas that assembles the Mac Pro, and in the same state, the manufacturer has plans for a server manufacturing plant. But nothing that can rival the industrial scale needed to produce iPhones locally—a mammoth undertaking that would involve years of investment, the training of skilled labor, and the establishment of an entirely domestic supply chain.
Source: CNBC
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