Apple asks White House not to apply tariffs to Mac Pro parts
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
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.
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.
Comments
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.
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.
Fixed it for you.
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.
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 ?
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.