Tim Cook Makes a ‘Good Case’ Against Apple Tariffs, Trump Says

Apple CEO Tim Cook at WWDC 2015 Credit: PriceM / Shutterstock
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Apple CEO Tim Cook has once again met with U.S. President Trump, with the two having dinner on Friday evening at the President’s golf club in Bedminster, New Jersey, where they discussed a number of issues, with the recent spate of new U.S. tariffs undoubtedly at the top of list.

Over the past few weeks, Trump has left no question that the U.S. plans to add a whole new slew of tariffs on products imported from China, and most recently suggested that Apple’s flagship products such as the iPhone would no longer be getting a free pass. In fact, last month, Trump even explicitly denied Apple’s request to avoid levies on the new Mac Pro, suggesting Apple should build a plant in Texas to continue manufacturing the new model in the U.S., as it did with the prior one.

However, in speaking with reporters after the dinner, Trump said that Cook “made a good case” that tariffs on its products could put Apple at a disadvantage over its main rival, Samsung, since the latter company’s products would not be subject to the same tariffs, according to Reuters.

I thought he made a very compelling argument, so I’m thinking about it.

U.S. President Donald Trump

The United States and South Korea struck a new trade deal last September, and since Samsung manufactures most of its products in that country, it would be able to avoid the punitive tariffs that the Trump administration is currently imposing on China in the ongoing trade war between the two countries. This would naturally give Samsung’s smartphones a serious leg up over the iPhone — a point that Apple already made somewhat more obliquely in a letter to the U.S. Trade Representative earlier this year.

I had a very good meeting with Tim Cook. I have a lot of respect for Tim Cook, and Tim was talking to me about tariffs. And one of the things, and he made a good case, is that Samsung is their number-one competitor, and Samsung is not paying tariffs because they’re based in South Korea. And it’s tough for Apple to pay tariffs if they’re competing with a very good company that’s not.

U.S. President Donald Trump

Although Apple is working to diversify its supply chain to move much of its production out of China, Samsung has the lead here, since much of its manufacturing is already located in South Korea and Vietnam, with little to none based in China.

Earlier this month, the Trump administration officially announced a new round of all-encompassing tariffs, and while a later release provided a reprieve for some of Apple’s products, such as iPhones, iPads, and MacBooks, it only delayed the inevitable, with the new tariffs expected to encompass those products on December 15th, rather than September 1st. Further, other Apple products, such as AirPods and the Apple Watch, didn’t fare nearly so well, and will still see the new tariffs go into effect on September 1st, as scheduled, and in fact Apple’s accessories, such as cables and chargers, have been faced with a 25 percent levy since earlier this year.

Although Trump’s original announcement of the dinner also noted that Apple would be “spending vast sums of money in the U.S.” the President made no comments on that to reporters following the dinner meeting.

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