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Apple CEO Tim Cook was once again at the White House yesterday to meet with U.S. President Donald Trump, likely discussing some of the many contentious trade issues that could impact Apple in the midst of Trump’s escalating trade war with China.
Few details are available in terms of what was discussed during the meeting, which wasn’t even officially announced as taking place. According to Reuters, it was actually revealed by Trump’s daughter, Ivanka Trump, during an event held with state governors on skills development. According to a White House spokesperson, the U.S. President spoke with the Apple CEO about “trade, U.S. investment, immigration and privacy.” A spokesperson for Apple could not be reached for comment.
While Cook visits the White House on a fairly regular basis, both to meet with the President as well as working with Ivanka Trump on her job training and education initiatives, this particular meeting may be more significant than most, at a time when President Trump is mulling whether to implement much broader tariffs in his trade war with China. Following an increase in existing tariffs last month, which saw many of Apple’s accessories hit with the increased 25 percent rate, Trump suggested that the next round of tariffs could see that 25 percent increase levied on all products coming in from China, including Apple’s iPhones, iPads, MacBooks, and other consumer products that have escaped the previous rounds of tariffs.
Meanwhile, Apple’s suppliers have been preparing for the worst, moving production to places like India, and Indonesia and Vietnam in order to escape any tariffs that the Trump administration may impose on China. Foxconn, Apple’s primarily assembly supplier, has said that it could begin producing sufficient iPhones outside of China to avoid any new tariffs, noting that it already has 25 percent of its production capacity outside of that country, and in light of the current trade relations with the U.S., it’s continuing to grow that capacity.
Of course, it wouldn’t be necessary for Foxconn to shut down its Chinese production entirely; only those iPhones that are bound for the U.S. would need to be made in other countries, however that currently represents one out of every four iPhones shipped, especially since iPhone sales have dramatically slowed in China itself.
Trump is reportedly still deciding on exactly what changes there will be in the next round of tariffs, although he doesn’t plan to make a final decision until sometime after the G20 summit in Osaka, Japan at the end of June, since he’s hoping to meet with Chinese President Xi Jinping for further informal trade talks. However, it’s likely that a big reason for Cook’s meeting was to once again make a case that Apple’s products should be excluded from the next round of tariffs, which he seems to have been succeeding in doing so far. Cook had a similar meeting with Trump last spring, and subsequently sent a letter to U.S. Trade Representative Robert Lighthizer outlining how proposed tariffs levied on Apple’s products would not only hurt Apple’s own business, but would ultimately harm Americans and the U.S. economy.