When U.S. President Donald Trump levied 145 percent tariffs on goods imported from China, Apple CEO Tim Cook started working to score Apple an exemption that would keep iPhone costs down.
According to The Washington Post, Cook had a phone call with Commerce Secretary Howard Lutnick last week, explaining how the tariffs would cause iPhone prices to increase. He talked to senior White House officials about the tariffs, and made sure not to say anything negative in public about Trump’s policies that would anger Trump. For Trump’s inauguration, Cook also personally donated $1 million.
Cook’s efforts paid off, and last weekend, the Trump administration exempted the iPhone, Mac, Apple Watch, iPad, and other electronics from the bulk of tariffs put in place on Chinese goods.
Apple’s tariff exemption could be temporary, however, as the day after the announcement, Trump said that there was “no tariff exception” and that no one would be “getting off the hook.” Apple and other tech companies will be “moving to a different tariff bucket” as Trump and his administration will be “taking a look” at semiconductors and the electronics supply chain in planned National Security Tariff Investigations.
With the on-again, off-again tariffs, Apple stock has fluctuated quite a bit over the course of the last few weeks. Stock was down as much as 20 percent, but it recovered some of its value after the exemption.
During the first Trump administration, Cook was able to prevent tariffs from impacting Apple devices like the iPhone and the Apple Watch by convincing Trump that the fees would give South Korean company Samsung an edge over Apple.
This time around, Trump has claimed he won’t be pressured by companies into lowering tariffs. On Monday, though, he said that he “helped Tim Cook recently,” a sign that Cook has an in with Trump that could keep Apple from being hit hard by future tariffs.
Trump insists that Apple could manufacture the iPhone and other products in the United States, but there are significant barriers that would prevent Apple from doing so, including the cost of building factories, a lack of skilled laborers, and the cost of paying U.S. workers.
Apple has pledged a $500 billion investment in the United States, and it plans to manufacture Private Cloud Compute servers at a facility in Houston in partnership with Foxconn. Servers are a much lower volume product that isn’t consumer facing, which makes them more feasible to assemble in the U.S.
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