Apple asks White House not to apply tariffs to Mac Pro parts

Posted:
in Current Mac Hardware edited July 23
Apple has made a request to the Trump Administration to keep parts used in the new Mac Pro from being affected by import tariffs, a move that aims to keep the cost of the premium macOS workstation as low as possible for its release to consumers in the United States.

Apple CEO Tim Cook with the new Mac Pro
Apple CEO Tim Cook with the new Mac Pro


The ongoing trade war between the United States and China has led to the former applying a wide variety of tariffs on products being imported into the country from China. So far products like the iPhone have largely avoided being hit by the import charges, but Apple is keen to avoid the modular Mac Pro from being subjected to the fees.

Apple made the exclusion request on July 18, Bloomberg reports, asking for relief from duties worth 25% of the value of key parts and accessories for a device that, though not outright named as a Mac Pro, can be identified by details included in official documentation. The list of parts includes the stainless steel and aluminum frame, power supplies, cables, circuit boards, and wheels.

The request is now in a public comment period ahead of being reviewed. Apple has so far declined to comment on the finding.

The new Mac Pro is a change in tactic for Apple from the previous model. While the preceding Mac Pro was largely constructed in the United States, Apple has instead shifted production to China for most of the parts, with Quanta Computer contracted for production at a factory near Shanghai.

Tariffs are a major potential problem for Apple, as hardware including iPhones, iPads, and Macs would potentially be covered by $300 billion in proposed Chinese import tariffs, on top of tariffs already in force. So far, Apple has managed to avoid having its main products affected by tariffs, but some accessories have been subjected to the charges.

Apple has been a vocal critic of the tariffs, and has suggested their application would "tilt the playing field" in favor of competing device vendors.

The tariffs are having an effect on some device producers who predominantly manufacture in China and import to the United States, but rather than shifting manufacturing more towards the US as originally proposed by President Donald Trump, the firms are instead looking to mitigate the tariff and keep production in countries with a relatively low labor cost.
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Comments

  • Reply 1 of 53
    hentaiboyhentaiboy Posts: 992member
    So just the final assembly is in the US? You can’t have your cake and eat it too Timmy.
    kestralboboliciousavon b7chemengin1
  • Reply 2 of 53
    seanismorrisseanismorris Posts: 1,043member
    I’m sure everyone that imports from China would like the same...

    The Trump administration has gotten seriously sidetracked demanding balanced trade rather than open markets and IP protection.

    Technically, no exceptions should be issued, and a fire should be lit to get a deal done.  That might be Apple’s intention anyways, the administration seems to get easily distracted with local politics, and the tariffs meanwhile are causing real damage.
    JWSCFileMakerFellerGeorgeBMacchemengin1
  • Reply 3 of 53
    emig647emig647 Posts: 2,413member
    hentaiboy said:
    So just the final assembly is in the US? You can’t have your cake and eat it too Timmy.
    https://www.nytimes.com/2019/01/28/technology/iphones-apple-china-made.html

    It isn’t that simple unfortunately. 
    ivanhwatto_cobra
  • Reply 4 of 53
    hodarhodar Posts: 277member
    Why should Apple parts be tariff free, when HP, Dell, Levino and everyrone else has to pay them?

    What Dell does, is they have "computer components", which amount to a case with power supply, motherboard, DVD drive installed.  Dell then adds the CPU, RAM and drive according to the customer order.  This is the model followed by HP, Dell, Levino, Asus and Acer.

    Why would Apple be any different?
    kestralivanhchemengin1
  • Reply 5 of 53
    gatorguygatorguy Posts: 20,925member
    hentaiboy said:
    So just the final assembly is in the US? You can’t have your cake and eat it too Timmy.
    No, not even the final assembly anymore. Apple is receiving a manufactured, assembled, and boxed product from China for shipping to resellers (?)/end-users. Assembly will no longer be done in the US. Remember this article on AI just last month? 
    https://appleinsider.com/articles/19/06/28/apples-new-mac-pro-is-being-manufactured-in-china
    "After six years of manufacturing the cylindrical Mac Pro in Texas, Apple has shifted production of the new Mac Pro abroad to China, even as trade tensions escalate between the U.S. and China..."

    IMO this is a picture-perfect example of hubris. Take a product that has been "manufactured in the US" for several years, move that product to the Chinese to build and package using Chinese workers instead of American, then ask for an exclusion from tariffs. Apple would have known when the final decision on assembly/manufacturing locale was made that there was a distinct possibility of the added cost of import tariffs if they chose China. 
    edited July 23 elijahgcgWerkskestralmuthuk_vanalingambeowulfschmidtchemengin1
  • Reply 6 of 53
    KuyangkohKuyangkoh Posts: 344member
    hodar said:
    Why should Apple parts be tariff free, when HP, Dell, Levino and everyrone else has to pay them?

    What Dell does, is they have "computer components", which amount to a case with power supply, motherboard, DVD drive installed.  Dell then adds the CPU, RAM and drive according to the customer order.  This is the model followed by HP, Dell, Levino, Asus and Acer.

    Why would Apple be any different?
    Agreed......if other tech companies pay then whats the excuse for Apple not to. They can afford to do so....otherwise assembles or make it in america
    kestralchemengin1
  • Reply 7 of 53
    JWSCJWSC Posts: 512member
    Not keen on the whole tariff thing at all.  But Apple should not be granted an exception.  A big mega-corp should not be favored over small to medium sized companies.
    elijahgkestralivanhFileMakerFellermuthuk_vanalingamchemengin1
  • Reply 8 of 53
    Good luck with that Apple. Trump wants to make China grovel.
    Until they do it is game on.
    Apple should build them in Ireland.

    Oh wait the POTUS wants a trade war with the EU as well.
    Ok, what about India?
    Nope.

    It looks like you are going to have to build them in the USA after all. That will double the cost but who cares eh?
    elijahggilly33FileMakerFellermuthuk_vanalingamGeorgeBMacchemengin1watto_cobra
  • Reply 9 of 53
    SoliSoli Posts: 9,197member
    hentaiboy said:
    So just the final assembly is in the US? You can’t have your cake and eat it too Timmy.
    It's impossible to manufacture everything in the Mac Pro in the US.
    watto_cobra
  • Reply 10 of 53
    gatorguygatorguy Posts: 20,925member
    Soli said:
    hentaiboy said:
    So just the final assembly is in the US? You can’t have your cake and eat it too Timmy.
    It's impossible to manufacture everything in the Mac Pro in the US.
    They don't have to in order to be exempt (in large part) from tariffs. Until this year it was a US product as far as trade was concerned AFAIK. Now it's not. 
    edited July 23 elijahgmuthuk_vanalingam
  • Reply 11 of 53
    dougddougd Posts: 270member
    Because Apple is "special"  
    boboliciouschemengin1
  • Reply 12 of 53
    elijahgelijahg Posts: 989member
    Apple has made a request to the Trump Administration to keep parts used in the new Mac Pro from being affected by import tariffs, a move that aims to keep the profit on the premium macOS workstation as high as possible for its release to consumers in the United States.

    Fixed it for you.
    edited July 23 boboliciousmuthuk_vanalingamentropysITGUYINSDchemengin1
  • Reply 13 of 53
    seanismorrisseanismorris Posts: 1,043member
    hodar said:
    Why should Apple parts be tariff free, when HP, Dell, Levino and everyrone else has to pay them?

    What Dell does, is they have "computer components", which amount to a case with power supply, motherboard, DVD drive installed.  Dell then adds the CPU, RAM and drive according to the customer order.  This is the model followed by HP, Dell, Levino, Asus and Acer.

    Why would Apple be any different?
    I’ve looked into Dell & HP recently (don’t know about the others) but they started soldering memory and SSDs like Apple.  This isn’t true for “workstations” but comparably not that many are sold.

    I think Apple’s request is more of message and a reminder than plea...  they’re making “news” to refocus attention to the trade war.
    pscooter63watto_cobra
  • Reply 14 of 53
    AppleishAppleish Posts: 133member
    After Individual 1 loses in 2020, and is prosecuted by the state of New York, his meager personal empire should be sold off to help pay for this nonsense.
    boboliciousgilly33GeorgeBMacwatto_cobraOnPartyBusiness
  • Reply 15 of 53
    Tim Cook has angered a lot of low-end professionals with this overpriced and underpowered Mac Pro entry-level machine. The entry-level iMac Pro has better specs than the Mac Pro. Apple has killed some of the independent professional users by this ridiculous price for the computer and the monitor without a stand. Of course, the cost of the monitor stand is a bit insane. So what can the tariffs do to the price of this ridiculously priced machine but make it more expensive! I believe Apple deserves whatever comes it's way because of their pricing policies. Tim had talked to the President and should have been able to gauge his personality and demeanor towards China. Apple insists on doing business with China despite the economic tug of war. Greed eventually will bite you in the butt! 
    kestralboboliciouselijahgSanctum1972ITGUYINSDchemengin1
  • Reply 16 of 53
    hodar said:
    Why should Apple parts be tariff free, when HP, Dell, Levino and everyrone else has to pay them?

    What Dell does, is they have "computer components", which amount to a case with power supply, motherboard, DVD drive installed.  Dell then adds the CPU, RAM and drive according to the customer order.  This is the model followed by HP, Dell, Levino, Asus and Acer.

    Why would Apple be any different?
    Well whenever you have government applying tariffs or other regulations there is the opportunity for special privileges to be given to special interest groups the party in power favors. As opposed to free markets where everyone has to deal with the same market forces.
    FileMakerFellerentropys
  • Reply 17 of 53
    ..."to keep the cost of the premium macOS workstation as low as possible" - really? - spec non oem components and make the damn things repairable...

    Is it time to add an overseer (like Jobs) with both 'taste' (to quote SJ re: MS) and narrow the focus of an 'operations' expert with an actual liberal arts and computer enthusiast ? 
    Solielijahgchemengin1
  • Reply 18 of 53
    JWSCJWSC Posts: 512member
    Tim Cook has angered a lot of low-end professionals with this overpriced and underpowered Mac Pro entry-level machine. [...] 
    If by ‘over priced and underpowered’ you mean that the Mac Pro doesn’t measure up to Deep Thought from THHGTTG, then I’d say you’re on to something.  Otherwise, your talkin’ smack while smokin’ crack!
    StrangeDayswatto_cobra
  • Reply 19 of 53
    Tim Cook has angered a lot of low-end professionals with this overpriced and underpowered Mac Pro entry-level machine. The entry-level iMac Pro has better specs than the Mac Pro. Apple has killed some of the independent professional users by this ridiculous price for the computer and the monitor without a stand. Of course, the cost of the monitor stand is a bit insane. So what can the tariffs do to the price of this ridiculously priced machine but make it more expensive! I believe Apple deserves whatever comes it's way because of their pricing policies. Tim had talked to the President and should have been able to gauge his personality and demeanor towards China. Apple insists on doing business with China despite the economic tug of war. Greed eventually will bite you in the butt! 
    Much to disagree with - the new Mac Pro has a substantially higher capacity for RAM and better graphics cards, which can be replaced if required. If the iMac Pro is better at the sort of tasks that you need to perform, then it's the better machine for you and you can decide whether or not to buy it.

    The Mac Pro doesn't have to be for every body, the iMac Pro doesn't have to be for everybody, the MacBook Pro doesn't have to be for everybody, ... you get the idea. But each machine has to appeal to a sufficiently large group of people (or, more precisely, generate enough profit compared to the development and manufacturing costs) to justify its existence.

    And it's fine to talk about the economic tug of war, but be aware it has been going on for several decades. It's not a simple matter, it's not just about government policies, it's not just about the decisions of a single company - the current situation is the evolution of 30+ years of decisions by innumerable individuals whether in corporations or private life to buy the cheapest goods and services rather than the best value goods and services. Over time, the accretion effect has been that the manufacturing capability has shifted to regions where the cost of labour has been subject to the demands of capital rather than to the needs of society.

    Most of this is perfectly rational: a business only wants to engage in the most profitable activities, so the lower-margin endeavours end up being adopted by companies that have a different cost structure (usually lower-cost labour) and find the reward for effort acceptable. The most profitable manufactured goods tend to be the more complex, big-ticket items; the components are often commodities with low margins, so those get manufactured in regions where the cost of labour is low enough to result in an acceptable profit.

    Eventually, managing the supply chain for all the components becomes a significant cost in time, complexity and money, and it's much more efficient to relocate the manufacture of the final product to the same region as the component suppliers - the alternative is to try and convince all of those people who gave up on the low-margin activities to engage in them again; I think we can all agree that's a difficult proposition at best.

    So, Apple "insists on doing business with China" because the infrastructure to manufacture their goods is in China (and other countries where labour costs are lower than in the US). Other US companies are in the same boat.

    You can insist all you like that the manufacturing should relocate, but you're arguing against the impulse to maximise profit and especially in the US that seems like a very difficult argument to win.
    JWSCwatto_cobra
  • Reply 20 of 53
    How much of the work in building something as complex as the Mac Pro is done by ‘workers’ (Chinese or American)? Most of the value is in complex machine-manufactured components and you can’t relocate a RAM-building machine or chip fabricator in anything under a few years. The machines will just become more expensive and trump gets a nice little sweetener in tariffs which will allow him to cut taxes on his billionaire mates. Another great shot in the foot from someone who doesn’t understand business and likes to employ powerless undocumented immigrants on low wages. He’s never made anything and doesn’t understand manufacturing ( other than tax free profits from hotels and resorts). 
    watto_cobra
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