Trump blinks: Floats suggestion that Apple might get a tariff exemption
In a press gaggle, President Donald Trump said that some companies that have been hit the hardest by the blockbuster tariffs applied by the administration may get some relief -- and nobody has been or will be hit harder than Apple.
Apple may see some relief from tariffs. Image source: Apple
It has been a rollercoaster week as President Trump finally enacted global "reciprocal" tariffs in an attempt to either bring manufacturing to the United States or be used as a negotiating tactic to lower other country's tariffs. The administration retaliated against China on Wednesday morning with a 104% tariff, then increased that tariff to 125%, and lowered every other tariff to the base 10% for 90 days.
Apple's stock bounced back slightly on the news of the pause, but after the market close, President Trump suggested that some companies may be considered for an exemption. He previously stated there would be no exemptions outside of the ones outlined already on "Liberation Day," but like with the global tariffs, he's changed his mind, citing "flexibility."
A reporter asks him about potential exemptions while he's out doing a meet-and-greet with race car drivers. Trump states that exemptions are being considered for companies "hit harder" by tariffs, but decisions will be made based on "instinct."
The question occurs at the 18-minute mark in the embedded video below.
Apple's reliance on China could mean an exemption, as it would be the company most affected by the continued 125% tariff. Price estimates place iPhone 16 Pro Max well over $2,000 when adjusted for the original 54% tariffs on China.
Customers rushed out to buy iPhones before Apple could announce new pricing, but now, that may not have been necessary. Exemptions may not occur, and anything could happen or change at a moment's notice, so Apple may continue shipping iPhones in massive quantities to stockpile during the 90-day reprieve.
Apple CEO Tim Cook played the long game and got the company in Trump's head early on as a good example. Cook donated $1 million to Trump's inauguration fund and attended the event, plus in-person dinners, to help keep Apple in good graces.
Additionally, Apple announced a $500 billion investment in the United States, which continues to be brought up by Trump in interviews. In today's Q&A, he even suggested that the $500 billion from Apple both a new announcement and for one plant -- and neither statement is true.
Apple stocks have been volatile since the tariffs were announced
The investment from Apple is a continuation of investments the company has made in the United States in recent decades, though previously more quietly. Apple has made these kinds of investments part of bigger PR pushes since the first Trump administration and announced a $430 billion investment during the Biden administration.
Each United States investment announcement has occurred close to big political events like elections or potential regulation. The current $500 billion investment announced by Apple is just a continuation of the $430 billion it promised in 2021, which was added on from a $350 billion promise made in 2018, and so on.
However, Tim Cook's playbook on handling Donald Trump allowed the latest announcement to come across as a result of Trump's policy. And so far, it seems to be working.
Perhaps Trump's instincts will kick in and select Apple as a potential exemption from tariffs, which may have been Tim Cook's plan all along. So, regardless of the twists and turns of the roller coaster going forward, Apple may be safer than some.
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Comments
As you wrote yourself earlier in the piece, China is not part of the 90-day reprieve, so unless Trump specificially excludes Apple, Apple doesn't have 90 days to stockpile.
Meanwhile in reality Trump has shown how much of a lame duck president he is and U.S. is much weaker on the world stage than it was a week ago.
And because you pointed out in an other thread that you woefully uninformed on trade, let me help you out. What you and Trumpty Dumpty seem to be missing is Trump can't protect Apple or any other company from China. If China decides to start targeting U.S. companies like Apple or Tesla and just boots them from the country then they are absolutely screwed. The U.S. doesn't have the advanced manufacturing capabilities of China and that is something that would take at least a decade to build out. China does almost all of the world's refining of rare earth minerals. Replacing that capability will take a decade to do. China holds way more cards in this trade war than just tariffs. Turmpty Dumpty has brought a squirt gun to a gun fight.
Maybe, just maybe, ponder the potential consequences of Trumps actions rather than blindly cheerleading for him
But seriously. There are so many ways to look at this. It definitely exposes predispositions. If you already hate Tru p, you’ll work to find the pessimistic angle. If you already like him, you’ll work to find the positive angle. And if you’re just a simple common sense guy, you’ll work to can appreciate what he’s trying to do while retaining the ability to see where it may go wrong - but also retain tje ability to see where it may go right. So far, for common sense folks, tje goal is admirable, results are mixed with the short time in action, and the pivot seems to preserve both the American tech company as well as the inherits of the action to begin with. The downside of all of it is of course the “short term pain” of stock volatility and posdible higher prices. But that was always a known quantity. Not some surprise. But the long term gain of fair trade is what the goal is. And it’s certainly at the very least worth the attempt. If it wasn’t trump, it would be someone else. The status quo is not sustainable without ceding our economy and leading status in the world. As one of the few truly free places in the world, this matters. We are all her for all things apple. They’re a great company. Another reason their great is that they stand for human rights, privacy, security, etc. on top of making the best stuff on earth. But take away the foundation of freedom upon which they operate and things go south. We see a microcosm in the EU and China. Hopefully, with the bold moves being made on the big stage, that’s as far as it goes.
Of course they will. That’s a given. But will they succeed? Not likely. They’ve already been riding the gravy train making free money on USA tariffs. Now that’s in question. Now they have to figure out if they want to play fair or hurt themselves.
we don’t know who the new default currency is but I suggest we’ll know next time an Apple keynote has a pricing chart. Tim Cook will set in stone with the words “iPhone 17 still xxxx” and oh the new increased USA price.
TLDR; Trade wars are stupid and accomplish nothing. They shouldn't be our go to. We need to stop acting like we are victim of other countries because we won't acknowledge our own mistakes. Let's just roll up our sleeves and do the hard work needed to bring manufacturing back to the U.S.