Tim Cook [left], President Donald Trump [right]
CEO Tim Cook’s working relationship with President Donald Trump has once again helped Apple escape issues in the U.S.-China tariff battle. Here’s how.
On April 11, following after a week of increases to the import tariff for Chinese goods entering the United States, President Trump made an announcement. While many products would be affected by a high import tariff of 145% at the time, Trump decided he was giving a reprieve on a variety of tech products and components.
While the reprieve itself is not permanent, with a semiconductor tariff expected to arrive in the future, the exemptions were immediately helpful to Apple. Indeed, a few days later, Trump confirmed that he was in talks with Tim Cook, and that he “helped” him with the tariff exemption.
In a report from the Washington Post, it appears that Cook did play a part in the tariff changes becoming a reality.
Warnings and silence
Cook talked to Commerce Secretary Howard Lutnick earlier in April, two people familiar with the phone call told the report. The call was about the potential impact of tariffs on iPhone prices, and also involved other senior White House officials.
There was also a decision by Cook to avoid publicly discussing or criticizing Trump and his policies. This was despite other executives taking to television to denounce the tariffs.
At the end of the week, the Trump Administration decided to implement the exemption on products Apple manufactures in China and ships to the United States. The decision had a byproduct of helping other major U.S. tech firms who made similar products.
There apparently wasn’t a complete agreement on the issue within the White House. Aide Peter Navarro allegedly wanted the tariffs to stay as they were without any electronics carveout.
The ol’ Cook razzle-dazzle
The chief reason for Trump listening to Cook is because of his established relationship that has continued into the second term. Wilbur Ross, commerce secretary during Trump’s first term in office, referred to Cook as “playing a very careful role” while being both very dependent on China and very important to U.S. interests.
Ross continued that Cook got respect from the White House because “he’s not a public whiner, he’s not a crybaby.” As he had a voice of reality, Ross believed that it was unsurprising that Cook would be heard and his comments well received by the administration.
The repeated conversations and meetings with Trump, which have spilled over into the new term, as well as initiatives such as a personal donation to Trump’s inaugural fund, have helped Cook stay an important person in Trump’s eyes.
The Cook playbook has also been one that executives of other companies have also copied following that first term. This has included attempts by CEOs such as Nvidia’s Jensen Huang and Google’s Sundar Pichai meeting with Trump over the last few weeks, schmoozing to try and minimize the damage from Trump’s policies.
Other major tech names have also attempted to make themselves more well known to Trump, all with the same motive to get into Trump’s good books.
Not Apple-specific, but it is
Outside of comments from Trump himself that he was helping Cook and Apple, the White House has still worked to try and make it seem like it wasn’t an Apple-specific exemption.
Lori Wallach, executive director of Rethink Trade at the American Economic Liberties Project, highlights how Apple has been the biggest beneficiary of the exemptions. Of seven tariff lines added after the April 2 exception list, Wallach points out that they all consist of products that Apple makes, but few others do.
For its part, the White House is running an investigation into semiconductors, as a means to appear above-board and not playing favorites.
White House spokesman Kush Desai insisted that there were no exemptions granted to benefit Apple or any other company specifically. The Administration is “taking a nuanced, strategic approach” on China, Desai continued.
Despite the pretense that everything is equal to all in the market when it comes to exemptions, the affair does demonstrate that Cook has led the way among other CEOs by cultivating a very beneficial relationship with the country’s chief.
