Cook: iPhone is 'made everywhere,' but US would be 'hurt most' from tariff

Posted:
in General Discussion edited June 2019
Apple CEO Tim Cook in a CBS Evening News interview aired Tuesday touched on hot-button issues like the U.S.-China trade war, saying his company has not yet been impacted by the international scrum. He also commented on recent scrutiny of Apple's outsized presence in the tech sector, its efforts to curb so-called device addiction and more.

Cook


Speaking with CBS Evening News managing editor Norah O'Donnell, Cook noted that while Apple has yet to see negative effects from the trade war, a potential tariff on iPhone would undoubtedly put a damper on sales.

Apple avoided a recent tariff hike on Chinese goods, but the company could get caught up in a another round of proposed levies worth $325 billion. Noting that a 25% tariff on the already expensive iPhone XS would add another $160 to its final price, O'Donnell asked whether such a scenario would impact sales.

"Sure it would. I'm hoping that doesn't happen," Cook said. "The truth is, the iPhone is made everywhere. It's made everywhere. And so -- a tariff on the iPhone would hurt all of those countries, but the one that would be hurt the most is this one."

For now, however, iPhone and other Apple devices are for the most part free and clear of President Trump's tariff play. The Chinese have also left Apple untouched.

"Well, it -- currently -- the Chinese have not targeted Apple at all. And I don't anticipate that happening, to be honest," Cook said.

Cook said much the same in April, noting effects of the trade war were near non-existent. At the time, the executive touted Apple's performance in the important growth market, saying sales were on the mend after a trouncing in late 2018.

It has been speculated that the exemption of Apple products from America's major tariff rounds is in part thanks to Cook's working relationship with Trump. Reports last year claimed the Trump administration promised Apple, and more specifically iPhone, would not be caught up in what has become a brutal trade struggle.

Cook commented on his relationship with Trump during Tuesday's CBS Evening News interview.

"I think we've had very straightforward discussions, many of them. He listens to the comments, which I appreciate," Cook said of Trump. "Sometimes he doesn't agree. But my philosophy on things is that, you always engage, even when you know that you're gonna wind up on very opposite sides."

O'Donnell pointed out that Cook, unlike other tech CEOs, regularly engages with the White House.

"I do. And I'm proud to. I mean, because I don't believe in the 'I disagree with you, and so I don't want to have anything to do with you,'" Cook said. "The way you stop the polarization is to talk. This is sort of like step one. And -- I don't want to be part of the problem. I want to be part of the solution."

The Apple chief also responded to criticisms charging the company is a monopoly. As seen on Monday in a preview of the full interview, Cook disagreed with assertions that Apple is "too big."

"No, I don't think so. I think that with -- but with size, I think scrutiny is fair. I think we should be scrutinized," he said. "I don't think anybody reasonable is going to come to the conclusion that Apple's a monopoly. Our share is much more modest where we don't have a dominant position in any market."

Cook said in no uncertain terms that Apple is not a monopoly. He also took issue with Sen. Elizabeth Warren's (D-MA) call to break up big tech companies.

O'Donnell quoted Warren, who is running for president in 2020, as saying, "Apple should break up its App Store and other parts of its business."

"Well, I strongly disagree with that. I think some people would argue, if you are selling a good, then you can't have a product that competes with that good. That's an argument more that takes you down the path that Walmart shouldn't be stocking alternative or house brand," Cook said. "And so this is decades of U.S. law here. And we'll be -- we'll tell our story to anybody that we need to or that wants to hear it."

O'Donnell asked Cook about Screen Time, an iOS feature designed to help users better manage device usage. Echoing previous comments on the feature, Cook lauded Screen Time's ability to curb device addiction.

"I'm saying we made the phone not so that you'll use it all the time. We made the phone to make your life better," Cook said. "But for me, my simple rule is if I'm looking at the device more than I'm looking into someone's eyes, I'm doing the wrong thing."

Apple will expand Screen Time's capabilities as part of iOS 13 and introduce the feature on macOS 10.15 Catalina, both of which is slated to debut this fall.

Cook went on to reiterate remarks regarding immigration and data privacy.

Comments

  • Reply 1 of 17
    sflocalsflocal Posts: 5,949member
    I'm a huge fan of Tim Cook, but I have to disagree with him here.  Sure, the tariffs will hurt in the immediate timeframe, but with what China has been doing for ages, I'd gladly take a little pain now for a long term gain in the long run.  China needs a strong smack in the face and a message sent that we (the world) will no longer continue the status quo.

    DoctorQlkruppAppleExposedracerhomie3chaickageorgie01uraharatedz98sdw2001donjuan
  • Reply 2 of 17
    EsquireCatsEsquireCats Posts: 1,241member
    If China targeted Apple, it would be extraordinary. Since the run on effect would be large losses on Chinese investment for businesses in the supply chain and a significant loss of employment and employment options for individuals who work in these businesses. Like any country, China is mindful that increases in unemployment create political instability - an especially pronounced problem for China due to its significant population that works in tech factories.

    One could argue that the reason Apple's services aren't entirely banned in China (like every other major US tech company) is solely because of their massive job giving status in the country.
    edited June 2019 racerhomie3chaickauraharatedz98sdw2001donjuan
  • Reply 3 of 17
    sirozhasirozha Posts: 801member
    sflocal said:
    I'm a huge fan of Tim Cook, but I have to disagree with him here.  Sure, the tariffs will hurt in the immediate timeframe, but with what China has been doing for ages, I'd gladly take a little pain now for a long term gain in the long run.  China needs a strong smack in the face and a message sent that we (the world) will no longer continue the status quo.

    My opinion of this is that what we are facing is karma. We wanted cheap products, and the corporations wanted cheap labor. We found cheap labor in China 35 years ago, and we have been enjoying cheap products made in China for nearly two generations. In the process, we have lost our ability to manufacture domestically. We no longer have manufacturing engineers, who are all either dead or retired. We will now have to hire Chinese engineers to teach us how to set up manufacturing processes domestically. While we have lost the manufacturing capabilities, the Chinese realized that they needed to have the IP rather than being an assembly line for the West. So, they have come up with all sorts of schemes to obtain the IP. They stole, they copied, they required joint ventures with western companies who wanted to sell in China, etc. First, they copied mindlessly, but then they realized that they needed to learn the technology. So, they started sending their students to the US and other western countries, and the Chinese government paid full tuition, room, and board for their students. The requirement was to bring back whatever the IP the students could steal from the universities. When the students graduated, they received Green Cards and offers to work for American companies in the US. They started stealing IP from the companies they were working for. Fast forward two decades, and we now have Huawei that's applying for more patents than any other western high-tech company. Huawei is a leader in 5G cellular tech. They are no longer stealing IP; they are now creating IP based on the two decades of copying, stealing, learning, and finally inventing. 

    Because of our stupidity and greed, the Chinese are living in the 21st century country, whereas most US cities look like they did in the early 1900s. Our railroads are dilapidated, while the Chinese are riding is bullet trains. We have not won a single war since WWII (except the Grenada invasion), while having the largest defense budget in the world that exceeds the defense budgets of the next six countries combined. China has built the second strongest military in the world while having spent a fraction of the US defense budget. If, God forbid, there should be a war between the US and China, it's absolutely not clear who would come out on top in a conventional military conflict. A war with China would be the most catastrophic war that the US has ever entered.

    The Chinese have executed flawlessly on their modernization program. We are the only ones to blame for what happened. Had it not been for our greed, the Chinese would still be living in adobe huts with roofs made of straw. 
    edited June 2019 macplusplusDoctorQracerhomie3CarnageLatkochaickadewmeCiprolgreg uvanjbdragon
  • Reply 4 of 17
    hentaiboyhentaiboy Posts: 1,249member
    Timmy has a point. 30% of the iPhone cost is in the display, which is made in South Korea.
    Ciprol
  • Reply 5 of 17
    flydogflydog Posts: 1,092member
    sirozha said:
    sflocal said:
    I'm a huge fan of Tim Cook, but I have to disagree with him here.  Sure, the tariffs will hurt in the immediate timeframe, but with what China has been doing for ages, I'd gladly take a little pain now for a long term gain in the long run.  China needs a strong smack in the face and a message sent that we (the world) will no longer continue the status quo.

    My opinion of this is that what we are facing is karma. We wanted cheap products, and the corporations wanted cheap labor. We found cheap labor in China 35 years ago, and we have been enjoying cheap products made in China for nearly two generations. In the process, we have lost our ability to manufacture domestically. We no longer have manufacturing engineers, who are all either dead or retired. We will now have to hire Chinese engineers to teach us how to set up manufacturing processes domestically. While we have lost the manufacturing capabilities, the Chinese realized that they needed to have the IP rather than being an assembly line for the West. So, they have come up with all sorts of schemes to obtain the IP. They stole, they copied, they required joint ventures with western companies who wanted to sell in China, etc. First, they copied mindlessly, but then they realized that they needed to learn the technology. So, they started sending their students to the US and other western countries, and the Chinese government paid full tuition, room, and board for their students. The requirement was to bring back whatever the IP the students could steal from the universities. When the students graduated, they received Green Cards and offers to work for American companies in the US. They started stealing IP from the companies they were working for. Fast forward two decades, and we now have Huawei that's applying for more patents than any other western high-tech company. Huawei is a leader in 5G cellular tech. They are no longer stealing IP; they are now creating IP based on the two decades of copying, stealing, learning, and finally inventing. 

    Because of our stupidity and greed, the Chinese are living in the 21st century country, whereas most US cities look like they did in the early 1900s. Our railroads are dilapidated, while the Chinese are riding is bullet trains. We have not won a single war since WWII (except the Grenada invasion), while having the largest defense budget in the world that exceeds the defense budgets of the next six countries combined. China has built the second strongest military in the world while having spent a fraction of the US defense budget. If, God forbid, there should be a war between the US and China, it's absolutely not clear who would come out on top in a conventional military conflict. A war with China would be the most catastrophic war that the US has ever entered.

    The Chinese have executed flawlessly on their modernization program. We are the only ones to blame for what happened. Had it not been for our greed, the Chinese would still be living in adobe huts with roofs made of straw. 

    Quite a novel you wrote, but most of it is bunk. Most US cities do not look like they did in the 1900s, and not sure what winning wars has to do with anything. And it’s clear you know nothing about China, a country where most people live in rural areas, the air is heavily polluted, and industrial accidents are a way of life. But yes they have nice trains. 

    By the way, Grenada was not a war. 
    uraharadonjuan
  • Reply 6 of 17
    AppleExposedAppleExposed Posts: 1,805unconfirmed, member
    hentaiboy said:
    Timmy has a point. 30% of the iPhone cost is in the display, which is made in South Korea.

    Which would explain why Apple is working on their proprietary tech which should not only be cheaper but better.

    Hopefully a different manufacturer will produce them so Apple stops feeding the beast and iKnockoff users can stop believing Samsung designs the iPhone display.
  • Reply 7 of 17
    LatkoLatko Posts: 398member
    In his analysis, Tim selectively observes the formal situation - thereby severely underestimating the effect on the market sentiment (towards everything US and its symbols, especially Apple)
    edited June 2019
  • Reply 8 of 17
    CiprolCiprol Posts: 52member
    flydog said:
    By the way, Grenada was not a war. 
    Indeed. Grenada was a military invasion and a pushover.
    urahararonn
  • Reply 9 of 17
    dewmedewme Posts: 4,188member
    It all comes down to supply and demand. Americans demand lots of cheap but still functional products and China is more than happy to supply them. American companies demand massive manufacturing capacity that can turn on a dime, staff up with compliant and affordable labor, and shield them from union actions and China is more than happy to supply it. Americans demand affordable food that's harvested for them by workers who aren't going to complain about substandard, demeaning, and physically demanding working conditions and Mexico is more than happy to supply it. Same deal with clothing, same deal with illegal drugs. Americans are massive consumers with many demands and a lot of money to spend. Americans don't really care what it takes to keep them satisfied or who gets thrown under the bus to keep the stream of stuff flowing into their lives. Americans want what they want. If China, Mexico, Viet Nam, Brazil, Bangladesh, or whomever is willing to step up and satisfy the insatiable American consumer's demands, who are they to complain or question why those on the supply side continue to give Americans exactly what Americans demand? Did American wallets suddenly come equipped with a slot for a conscience? Didn't think so.
    muthuk_vanalingam
  • Reply 10 of 17
    We found cheap labor in China 35 years ago, and we have been enjoying cheap products made in China for nearly two generations. In the process, we have lost our ability to manufacture domestically.
    Common misconception. Manufacturing output in the United States today is 2X what it was in the 1980s. The difference is that there are now 1/3 as many human jobs required to achieve that output. Automation has arguably been the biggest factor in lost jobs domestically, not overseas manufacturing. In addition, companies didn't really move their domestic manufacturing to China in order to lower prices. They did it to increase profit. Or, in the case of Apple, they did it because the U.S. never actually had a large manufacturing base for computer electronics. The consumer computer industry didn't start mushrooming until the 1990s.
    DAalsethtmay
  • Reply 11 of 17
    greg uvangreg uvan Posts: 85member
    flydog said:

    Quite a novel you wrote, but most of it is bunk. Most US cities do not look like they did in the 1900s, and not sure what winning wars has to do with anything. And it’s clear you know nothing about China, a country where most people live in rural areas, the air is heavily polluted, and industrial accidents are a way of life. But yes they have nice trains. 

    By the way, Grenada was not a war. 
    There was certainly a good dose of hyperbole and exaggeration in his post. But he has a few good points. China is in a much stronger position on the world stage, in large part because the US outsourced so much of its production to them. The west has been bleeding cash into the Chinese economy for decades. And a lot of the stuff they sell back to us is just throw away crap. 

    But it's a tricky situation now. Who knows what the best way to deal with it is. One thing is sure though, the US (and Canada, etc) was not thinking very clearly about the longterm future as we greedily consumed cheap Chinese-manufacturing. 
  • Reply 12 of 17
    sdw2001sdw2001 Posts: 17,853member
    sirozha said:
    sflocal said:
    I'm a huge fan of Tim Cook, but I have to disagree with him here.  Sure, the tariffs will hurt in the immediate timeframe, but with what China has been doing for ages, I'd gladly take a little pain now for a long term gain in the long run.  China needs a strong smack in the face and a message sent that we (the world) will no longer continue the status quo.

    My opinion of this is that what we are facing is karma. We wanted cheap products, and the corporations wanted cheap labor. We found cheap labor in China 35 years ago, and we have been enjoying cheap products made in China for nearly two generations. In the process, we have lost our ability to manufacture domestically. We no longer have manufacturing engineers, who are all either dead or retired. We will now have to hire Chinese engineers to teach us how to set up manufacturing processes domestically. While we have lost the manufacturing capabilities, the Chinese realized that they needed to have the IP rather than being an assembly line for the West. So, they have come up with all sorts of schemes to obtain the IP. They stole, they copied, they required joint ventures with western companies who wanted to sell in China, etc. First, they copied mindlessly, but then they realized that they needed to learn the technology. So, they started sending their students to the US and other western countries, and the Chinese government paid full tuition, room, and board for their students. The requirement was to bring back whatever the IP the students could steal from the universities. When the students graduated, they received Green Cards and offers to work for American companies in the US. They started stealing IP from the companies they were working for. Fast forward two decades, and we now have Huawei that's applying for more patents than any other western high-tech company. Huawei is a leader in 5G cellular tech. They are no longer stealing IP; they are now creating IP based on the two decades of copying, stealing, learning, and finally inventing. 

    Because of our stupidity and greed, the Chinese are living in the 21st century country, whereas most US cities look like they did in the early 1900s. Our railroads are dilapidated, while the Chinese are riding is bullet trains. We have not won a single war since WWII (except the Grenada invasion), while having the largest defense budget in the world that exceeds the defense budgets of the next six countries combined. China has built the second strongest military in the world while having spent a fraction of the US defense budget. If, God forbid, there should be a war between the US and China, it's absolutely not clear who would come out on top in a conventional military conflict. A war with China would be the most catastrophic war that the US has ever entered.

    The Chinese have executed flawlessly on their modernization program. We are the only ones to blame for what happened. Had it not been for our greed, the Chinese would still be living in adobe huts with roofs made of straw. 
    I agree with much of that, save the part about a conventional military conflict.  China's forces do not compare with ours...not even close.  They have 1 aircraft carrier that is a refitted Soviet ship.  We have what...10?  Their airpower doesn't match ours in the slightest.  They don't have a B2, or even a B1.  Their best fighters don't match up to the F/A 18, much less the F-22 or the F-35.  In an all-out conventional conflict, we would decimate them.  Where they are a threat is in smaller, regional conflicts where they get there first (think Taiwan).  Or in area denial operations.  They could conceivably attack a carrier or take out some satellites.  That would then escalate.  Their goal is to be able o take us on by 2050, but they just aren't there.  
    ronn
  • Reply 13 of 17
    jbdragonjbdragon Posts: 2,246member
    While we may have some short term pain in the form of price hikes from tariffs. In the long run this trade war will hurt China far, far more than us. Just the simple fact that company's are now seeing what can happen, and now are thinking, maybe we shouldn't put everything into China and instead diversify instead. Going into other country's. It won't happen overnight, but these other country's can do what China did. That is lost income going into China. The longer it lasts, the bigger the cascading effect.

    Some things will come back to the U.S. Some things will move to Indonesia and India and other locations. Who knows what they will look like 30 years from now. China could end up taking a huge hit. The U.S. for now end up paying a little more for products. That's fine by me. Just means I buy less. Which again just Hurts China even more so. I'm already on the iPhone 4 year plan. My iPhone 4, 4 years. My iPhone 6, 4 years, my iPhone XS I have another 3+ years to go I guess. Maybe by then the trade war will be over.

    This can end today. All China has to do is have FAIR trade. I'm glad someone is finally doing something about it. China has gotten away with their crap for far to long. What else can we do at this point? We aren't going to go into a actual WAR with China over this. Nothing done up this this point for all these years has done anything. Really all that is left is Tariffs. What else can be done?
  • Reply 14 of 17
    ronnronn Posts: 504member
    The US thinks short term and reactionary. China has been thinking long-term and will weather any "pain" the Imbecile-in-Chief thinks he's inflicting.

    The iPhone may be safe, for now. But again, China is thinking long-term. Chinese firms are in a position to overtake Apple internally. The Chinese government has far stronger support for its efforts than the US -- it's baked-in for totalitarian regimes.
    Sanctum1972
  • Reply 15 of 17
    We found cheap labor in China 35 years ago, and we have been enjoying cheap products made in China for nearly two generations. In the process, we have lost our ability to manufacture domestically.
    Common misconception. Manufacturing output in the United States today is 2X what it was in the 1980s. The difference is that there are now 1/3 as many human jobs required to achieve that output. Automation has arguably been the biggest factor in lost jobs domestically, not overseas manufacturing. 
    Common cop out that is in no way accurate or even attempts consider all relevant factors. No one buys this nonsense, so stop selling it.
  • Reply 16 of 17
    Sanctum1972Sanctum1972 Posts: 112unconfirmed, member
    sdw2001 said:
    sirozha said:
    sflocal said:
    I'm a huge fan of Tim Cook, but I have to disagree with him here.  Sure, the tariffs will hurt in the immediate timeframe, but with what China has been doing for ages, I'd gladly take a little pain now for a long term gain in the long run.  China needs a strong smack in the face and a message sent that we (the world) will no longer continue the status quo.

    My opinion of this is that what we are facing is karma. We wanted cheap products, and the corporations wanted cheap labor. We found cheap labor in China 35 years ago, and we have been enjoying cheap products made in China for nearly two generations. In the process, we have lost our ability to manufacture domestically. We no longer have manufacturing engineers, who are all either dead or retired. We will now have to hire Chinese engineers to teach us how to set up manufacturing processes domestically. While we have lost the manufacturing capabilities, the Chinese realized that they needed to have the IP rather than being an assembly line for the West. So, they have come up with all sorts of schemes to obtain the IP. They stole, they copied, they required joint ventures with western companies who wanted to sell in China, etc. First, they copied mindlessly, but then they realized that they needed to learn the technology. So, they started sending their students to the US and other western countries, and the Chinese government paid full tuition, room, and board for their students. The requirement was to bring back whatever the IP the students could steal from the universities. When the students graduated, they received Green Cards and offers to work for American companies in the US. They started stealing IP from the companies they were working for. Fast forward two decades, and we now have Huawei that's applying for more patents than any other western high-tech company. Huawei is a leader in 5G cellular tech. They are no longer stealing IP; they are now creating IP based on the two decades of copying, stealing, learning, and finally inventing. 

    Because of our stupidity and greed, the Chinese are living in the 21st century country, whereas most US cities look like they did in the early 1900s. Our railroads are dilapidated, while the Chinese are riding is bullet trains. We have not won a single war since WWII (except the Grenada invasion), while having the largest defense budget in the world that exceeds the defense budgets of the next six countries combined. China has built the second strongest military in the world while having spent a fraction of the US defense budget. If, God forbid, there should be a war between the US and China, it's absolutely not clear who would come out on top in a conventional military conflict. A war with China would be the most catastrophic war that the US has ever entered.

    The Chinese have executed flawlessly on their modernization program. We are the only ones to blame for what happened. Had it not been for our greed, the Chinese would still be living in adobe huts with roofs made of straw. 
    I agree with much of that, save the part about a conventional military conflict.  China's forces do not compare with ours...not even close.  They have 1 aircraft carrier that is a refitted Soviet ship.  We have what...10?  Their airpower doesn't match ours in the slightest.  They don't have a B2, or even a B1.  Their best fighters don't match up to the F/A 18, much less the F-22 or the F-35.  In an all-out conventional conflict, we would decimate them.  Where they are a threat is in smaller, regional conflicts where they get there first (think Taiwan).  Or in area denial operations.  They could conceivably attack a carrier or take out some satellites.  That would then escalate.  Their goal is to be able o take us on by 2050, but they just aren't there.  
    You might want to take a look at this: https://www.rand.org/paf/projects/us-china-scorecard.html

    China is catching up very, very quickly especially here: https://www.washingtonpost.com/world/national-security/us-military-risks-falling-victim-to-chinas-effort-to-gain-technology-edge-report-warns/2019/06/05/c051204e-87b7-11e9-b1a8-716c9f3332ce_story.html?noredirect=on&utm_term=.9610083d4dd4

    They have stealth fighters as well: https://chinapower.csis.org/china-chengdu-j-20/

    And they do have bombers: https://www.nextbigfuture.com/2018/12/chinas-h-20-stealth-bomber-copy-of-the-us-b2-leads-a-new-wave-of-military-gear.html

    I wouldn't underestimate China because they probably have some things under their sleeves that the U.S. doesn't know about. I suspect they might be able to take us on way before 2050, so the 2030s is a realistic time frame. 
  • Reply 17 of 17
    Sanctum1972Sanctum1972 Posts: 112unconfirmed, member
    ronn said:
    The US thinks short term and reactionary. China has been thinking long-term and will weather any "pain" the Imbecile-in-Chief thinks he's inflicting.

    The iPhone may be safe, for now. But again, China is thinking long-term. Chinese firms are in a position to overtake Apple internally. The Chinese government has far stronger support for its efforts than the US -- it's baked-in for totalitarian regimes.
    Agreed. Tim Cook should keep his mouth shut because what he's saying is kind of coming off like a dare to China. If he thinks China won't make any moves on his company, he should really think twice because they can if they wanted to. 
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