Apple Dodges Latest Round of Trump Tariffs

It seems that Apple’s additional $100 billion commitment to US manufacturing is paying off. Following Apple CEO Tim Cook’s visit to the White House, where he shared the news yesterday, President Trump announced that Apple would effectively be exempt from his administration’s plans to levy a new tariff on chips and semiconductors.

Tim Cook has been doing everything he can to stay in the mercurial President’s good graces. Earlier this year, insiders said that Apple’s CEO has “a very good relationship with the president,” because he holds his cards close to the vest, avoids publicly disparaging the administration, and repeatedly speaks with and meets with the President and the White House officials to politely express his concerns.

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Even during Trump’s first administration, Apple managed to avoid the brunt of the US-China trade war, something which the President credited to Cook making “a good case” against placing tariffs on iPhones. In April, as Trump was ratcheting Chinese tariffs up to 145%, the administration suddenly put a hold on tariffs for a whole swatch of consumer electronics — a category which included the iPhone, iPad, and Mac.

“I helped Tim Cook recently,” President Trump explicitly said while announcing the exclusion, and now it appears he’s continuing that trend.

While Trump has insisted that the iPhone should be made in the United States and has vocally opposed Apple shifting production to India, it appears that the company’s other US investments have softened the President’s stance. After all, $600 billion is a lot of money — and the shiny glass-and-24-karat-gold bauble Cook gave the President likely didn’t hurt either.

As Trump announced a staggering 100% tariff on consumer electronics and other related products, he also said that companies that have committed to building in the United States won’t be on the hook, citing Apple as an example.

We’re going to be putting a very large tariff on chips and semiconductors. The good news for companies like Apple is, if you’re building in the United States, or have committed to build, without question, committed to build in the United States, there will be no charge.

President Donald J. Trump

Apple is “not making this kind of investment anywhere in the world, not even close,” Trump added.

In many ways, Apple’s investment is a lot of smoke and mirrors, but it’s clear that Tim Cook knows precisely how to play the game. When Apple announced its initial $500 billion plan in February, many analysts and pundits were quick to point out that most of this spending wasn’t new. Apple seized the opportunity to hype something it was already effectively doing, allowing the Trump administration to claim a win.

It’s not unlike what the company did six years ago, when it invited President Trump to “open” a Mac Pro plant that had already been operating since 2012. Trump took credit for bringing “high paying jobs back to America,” and Tim Cook merely sat back and smiled.

While Cook’s latest moves to placate President Trump haven’t been received well in all corners, it’s important to remember that as Apple’s Chief Executive Officer, his responsibility is to Apple’s shareholders. He’s held firm in other areas that are of importance to Apple’s investors and employees, but avoiding a 100% tariff on iPhones and other Apple products is considerably less controversial, especially when all it costs are a few nice words, the kind of investments that Apple would make anyway, and a shiny trinket for the Oval Office.