On Sunday, speaking to gathered reporters, President Donald Trump addressed his evening meeting with Tim Cook, CEO of Apple. Trump claimed that Cook put forward a “convincing argument” concerning the administration’s tariffs on goods manufactured and assembled in China. Cook said that the tariffs had an unfavorable effect on the U.S. company. This is mostly due to the fact that Samsung, its primary rival, does the majority of manufacturing in South Korea. Thanks to this, they don’t have to pay the levy that Apple does, and it gives them a significant competitive edge.
Simultaneously, President Trump issued a warning to China’s government. Namely, he claimed it would be difficult for the trade war to cease should the Chinese officials resort to violence in order to break down demonstrations in Hong Kong. He also announced there would be a three-month delay on the imposing of the new tariffs on China meanwhile hinting there might be more concessions on the way. The new tariffs (standing at 10%) were initially expected to go into effect on September 1, which would have had an impact on Apple’s iPads and iPhones.
In May this year, the president raised tariffs to 25% (they were previously 10%) on around $200 billion worth of Chinese goods. However, later on, he canceled aluminum and steel tariffs on Mexico and Canada. In retaliation, China raised its tariffs a month later against U.S. products by more than 15%.
Meeting With Tim Cook
News reporters flocked at an airport in New Jersey, where President Trump was on a return flight to Washington after meeting with the California-based company’s CEO. He said that the two had a productive meeting and expressed his respect for the businessman. During the meeting, they talked about the tariffs that caused a lot of controversy on the worldwide scale. According to Trump, Cook made a good argument about Samsung, Apple’s primary competitor, saying that Samsung doesn’t have to deal with tariffs because they are a company based in South Korea.
Apple CEO continued on to say that it was difficult to pay tariffs and compete at the same time with a company that doesn’t, claiming that Samsung is a “very good competitor.” Donald Trump said that Cook had some compelling arguments and that he would definitely think about what was said. This isn’t the first time President Trump was in a meeting with Cook, as they met several times this year.
In a tweet, Trump talked about how the relationship with China was developing. He was optimistic about it, claiming that the talks between the two governments were productive and that they were doing well.
For a while now, the president (and some Democratic leaders as well) has been talking about how China profited off the United States by utilizing unfair trade practices. Namely, according to Robert Lighthizer, U.S. Trade Representative, some of those practices include theft of intellectual property. According to Lighthizer’s estimations, the state-sanctioned theft could result in U.S. companies losing between $225 billion and $600 billion on a yearly basis.
Dealing With China
However, while talking to the press at the airport, Trump had a lot harder approach on the topic than he did on social media. He warned the Chinese government that reaching a trade agreement would prove impossible if they decided to use force against demonstrators in Hong Kong. The main reason for Hong Kong demonstrations is an extradition bill which would mean that Hong Kong officials would give permission for extraditions to mainland China.
Trump said that it would be hard for the United States to deal with China if they caused another Tiananmen Square situation. With this, the president alluded to 1989 demonstrations where armed forces openly shot and killed demonstrators. He also denied reports of the country preparing to reopen business with Huawei, Chinese telecom magnate. The U.S. government put the company on an export blacklist back in June, claiming that they were a source of national security concerns. Allegedly, the president’s administration worried that Huawei was connected with Chinese spy networks.
The reports, which came out in The Wall Street Journal and Reuters, claimed that the president would announce a 90-day license extension on Monday. This extension would serve to give the Chinese company time to carry out orders which were placed before the ban occurred. Nonetheless, Trump denied this, saying that he didn’t intend to do any business as it posed a national security threat. However, he added that he would make a decision on Monday. He claimed that, while there were no business plans in place, that didn’t necessarily mean they couldn’t come to an agreement once a new trade deal was agreed upon.
Apple On Tariffs
At this point in time, it’s not really easy to figure out what President Trump’s stance on the matter is. His comments about the Chinese company lack consistency. For instance, after a meeting with Xi Jinping, his Chinese counterpart, Trump said they would keep selling to Huawei, with the administration officials having to retract the comments.
Apple has tried to affect the administration’s decision on the tariffs with a view to preserving its profit margins. Earlier, in June, they sent a letter to Lighthizer, asking the representative to decide against tariffs against China. They said that the tariffs would include all of the company’s major products, such as iPad, Mac, iPhone, AppleTV, and AirPods. The tariffs would also cover parts and batteries used for products in the States. They warned that the tariffs on Apple’s products negatively affected how much money the company contributed to the U.S. economy. Additionally, it would impact Apple’s competitiveness on the global market. Meanwhile, their competition from China is without a strong presence on the U.S. market. Consequently, the tariffs wouldn’t hurt them as much.
When asked to comment on the meeting, the company didn’t immediately respond. Instead, they released a statement in which they focused on how much the company invested in the nation’s economy. They highlighted the fact that they supported a significant amount of jobs in the app economy, which currently employs 1.9 million Americans. This number, according to Apple, reflects an increase of 325,000 jobs in the last 18 months. They also said that they had 90,000 employees across the 50 states, and the company planning to open up 20,000 additional jobs by 2023.
Dinner With Cook
Trump was considering what was suggested by Tim Cook even before the meeting took place. Trump tweeted about having dinner with Cook, claiming that Apple would be injecting “vast sums of money” in the United States. The two dined in Bedminster, New Jersey, which was also their meeting place in August 2018.