When US President Donald Trump imposed 145% tariffs on goods imported from China, Apple CEO Tim Cook immediately took action to prevent or mitigate the catastrophic impact on the company's revenue. He expects the tariffs to Trump's tariffs To raise Apple product prices, which will slow the company's sales and cost it billions of dollars. In the following lines, we will learn about Tim Cook's strategy and how he succeeded in convincing Trump to exempt Apple from tariffs.
Trump's tariffs
Trump has imposed tariffs on several countries around the world, which will affect the price of Apple products. Experts expect the price to reach IPhone With tariffs three times its current price, Trump imposed high tariffs on China compared to other countries. China is considered the world's factory, and the American company relies on it to assemble more than 90% of iPhones. Up to 80% of Apple's various devices are also produced in China. Despite Apple's ongoing attempts to reduce its dependence on China and use alternatives such as India, Vietnam, and even Brazil, it will take time to gradually abandon them. Therefore, Trump's tariffs were expected to have a significant impact on Apple's prices. However, Tim Cook's shrewdness was able to overcome this disaster.
How Cook Saved Apple From Trump's Tariffs
Tim Cook's strategy has been to work to exempt Apple from tariffs, keeping iPhone prices low.
- According to the Washington Post, Cook spoke by phone with Commerce Secretary Howard Lutnick, explaining how the tariffs would raise the prices of its products, putting it at a disadvantage to companies like Samsung, Huawei, Xiaomi, and others.
- The Apple CEO also spoke to senior White House officials about the tariffs and persuaded them of his point of view.
- He also made sure not to make any public criticism or negative statements about Trump's policies that might anger him.
- Apple has also pledged to invest $500 billion in the United States and plans to manufacture its own cloud computing servers at a facility in Houston in partnership with Foxconn.
- Most importantly, Tim Cook He had donated about $1 million from his own account to Trump's inauguration as President of the United States of America.
Cook's efforts paid off, as the Trump administration exempted iPhones, Macs, Apple Watches, iPads, and other electronic devices from most tariffs imposed on Chinese goods.
However, Apple's exemption from tariffs may be temporary, as Trump has stated that there will be no exemption from tariffs. Trump and his administration will conduct a study of the semiconductor and electronics supply chain, and then impose different tariffs on Apple and other technology companies.
Not the first time
It's worth noting that this isn't the first time Cook has managed to influence Trump. During his first term, he convinced him that tariffs would give South Korean company Samsung an advantage over Apple. This time, Trump stated that he wouldn't have to reduce tariffs for the sake of companies. However, he pointed to his close relationship with Cook, which could protect Apple from being severely impacted by future tariffs.
Conclusion
Finally, Trump insists that Apple is capable of manufacturing the iPhone and other products in the United States. However, there are significant obstacles preventing Apple from doing so, including the cost of building factories, a shortage of skilled labor, and the high cost of paying American workers wages compared to Chinese workers. Analysts believe that the price of an iPhone could rise to $3500 if it were manufactured in America.
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