Trump Praises Apple, But Orders U.S. Companies to Get out of China

Although U.S. President Donald Trump continues to applaud his relationship with Apple CEO Tim Cook, he’s also pulling no punches in saying that U.S. companies will suffer in the ongoing trade war if they continue to insist on doing business in China.

In a tweet storm last Friday, the President ordered U.S. companies to “immediately start looking for an alternative to China” — a proclamation that sent Apple stock tumbling down by over four percent, according to CNBC, despite the fact that Trump had previously praised Apple CEO Tim Cook for their cordial relationship, and even added that Cook made a compelling case against tariffs on Apple products.

Cook is a “Great Executive”

After a private dinner between the U.S. President and Tim Cook last week, Trump told reporters that he considers Cook a “great executive” because he reaches out and calls Trump “whenever there is a problem.”

By contrast, Trump says, other executives don’t do this, choosing instead to “go out and hire very expensive consultants” and deal with the Trump administration at arms’ length.

Certainly, Cook’s warm relationship with President Trump has been successful at staving off the rising ride of tariffs and keeping Apple products out of the fray, although it remains to be seen how long that will continue to be the case. A new round of much wider tariffs is set to take effect next month, and while some of Apple’s product categories have gotten a reprieve for the holiday season, they haven’t been taken off the list entirely.

However, Trump did say that Cook made a good case for why these tariffs would hurt Apple’s business and the U.S. economy — notably that its chief rival, Samsung, isn’t affected by tariffs as it does almost all of its manufacturing outside of China. Referring to Cook and Apple in comments to reporters, Trump added that “I gotta help him out short-term, because it’s a great American company.”

Escalating Trade Wars

Sadly, however, none of this seems to have prevented Apple’s stock from taking a plunge as the trade war between the two countries escalates. Last week China said it would levy tariffs on an additional $75 billion worth of U.S. goods, to which Trump responded by accusing China of stealing intellectual property from the United States “at a rate of hundreds of billions of dollars per year” and ordered U.S. companies to start making immediate plans to get out of China.

Our great American companies are hereby ordered to immediately start looking for an alternative to China.

U.S. President Donald Trump, on Twitter

Despite Trump’s gracious comments regarding Apple and Tim Cook, he clearly expects Apple to fall into line in the longer term, and has already denied Apple’s request for tariff relief on the new Mac Pro, saying he expects Apple to built a plant in Texas instead, as it did for the prior Mac Pro.

While Apple has begun moving production out of China for at least some of its products, its not reasonable to expect a company with a supply chain the size of Apple’s to turn on a dime, so it seems that Trump may be willing to provide some short-term leeway for Apple to restructure its supply chain, it’s unclear how long this will last before there are no longer exceptions for any of Apple’s products.