Apple Urges President Trump to Leave Its Products out of the U.S.-China Trade War

Apple CEO Denounces President's Withdrawal from Paris Climate Accord Credit: Business Insider
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With U.S. President Donald Trump set to unleash a new wave of tariffs in his trade war against China, Apple is once again pushing back against the proposal that would see its own products swept up in next round — a set of tariffs which Trump has already suggested may include a 25% levy on everything coming from China, with no exceptions.

Apple CEO Tim Cook was in Washington again last week, visiting the White House to discuss a number of issues with President Trump, and while a spokesperson said the conversation covered “trade, U.S. investment, immigration and privacy,” it’s almost certain that the new round of tariffs currently being mulled by Trump was at the top of the list.

Following that meeting, Apple sent another letter to U.S. Trade Representative Robert Lighthizer, dated June 17th, offering its comments on the newest trade proposal that would see all of its products coming from China — including the iPhone, MacBook, iMac, iPad, iPod touch, Apple Watch, AirPods, HomePod, Beats, Apple TV, and almost all accessories and repair parts — hit with a staggering 25 percent tariff. While Apple’s chargers and cables were impacted by the last round of tariffs, the company’s main products have thus far managed to escape the trade war unscathed.

In the letter, Apple is urging the U.S. government not to impose tariffs on these products, citing its own contributions to the U.S. economy.

Apple is a proud U.S. company and one of the largest job creators in the United States. We are responsible for over 2 million jobs across all 50 states, including Apple’s direct employees, employees at our manufacturing and retail partners, and Americans who make their living in the vibrant and growing app economy.

Apple, in a letter to U.S. Trade Representative Robert Lighthizer

In addition to pointing out the massive size of its U.S. operations, Apple also reminds Lighthizer of its 2018 commitment to make a direct contribution of over $350 billion to the U.S. economy over five years, pointing out that it is on track to meet this goal by opening several new sites and adding more new jobs in the U.S., and that it’s also the largest corporate taxpayer in the U.S., paying “billions more each year in local property, sales, and employee taxes.”

Apple points out, however, that this could change with the proposed new tariffs, which would “result in a reduction of Apple’s U.S. economic contribution.” Apple also adds that such tariffs would actually “tilt the playing field” to give its competitors an advantage, since most of them don’t have a large enough presence in the U.S. market to be impacted by U.S. tariffs, and could therefore continue doing business as usual while Apple is hard hit by the new levies. The letter also pointedly mentions “Chinese producers” specifically, along with “other major non-U.S. competitors,” most likely to imply that such tariffs could ultimately be helping China in the trade war rather than hindering it. Both comments are also accompanied by footnotes that have been redacted as “Business Confidential” in the public version of the letter.

As an annex to the letter, Apple includes a list of specific tariff codes that would be affected under the proposal, which also encompass a great many non-Apple products, of course. For example, code 8517120050, Radio Telephones Designed For The Public Cellular Radiotelecommunication Service, not only includes the iPhone, but pretty much every other cellular phone ever made. This makes Apple’s request to avoid tariffs more complicated, since it’s unlikely that the Trump Administration would be able to make an exemption solely for Apple, and excluding these tariff codes entirely would leave every other smartphone and even feature phone also exempt from levies.

So far, Apple has been successful in its lobbying efforts; a similar letter sent to Lighthizer last fall likely contributed to its escape from the last major round of tariffs. However, it’s by no means certain that its luck will continue, and Apple’s supply chain has been preparing for the worst for a while now. Earlier this week, Apple also began specifically asking its suppliers to evaluate moving production out of China, so while the iPhone maker would undoubtedly prefer to maintain the status quo, it’s also definitely ramping up its emergency preparedness as well.

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