Trump announced a 100% tariff on imported goods, including semiconductors, but exempted companies that relocate production to the United States. Meanwhile, Apple CEO Tim Cook joined the president in the Oval Office to announce a new $100 billion investment plan.
In an interview with reporters, Trump clarified: "We will impose a high tariff on chips and semiconductors, approximately 100%. However, companies like Apple that manufacture or commit to manufacture in the United States will not be subject to tariffs. Even companies in the pre-production stages will be exempt as long as they can create a significant number of jobs." This policy is undoubtedly a major victory for Apple and Cook. Trump's escalating tariff threats could significantly increase the production costs of Apple's iconic phones and computers.
Apple's $100 billion investment in the United States covers a new manufacturing initiative aimed at bringing more Apple products to the United States. Apple revealed that its partners in its US manufacturing initiative include glass manufacturers Corning, Applied Materials, and Texas Instruments. Corning will establish a dedicated factory in Kentucky to produce Apple glass, increasing the company's workforce in the state by 50%. Notably, Corning was the glass supplier for Apple's first iPhone.
Apple previously pledged to invest $500 billion in the United States over the next four years. This plan represents an acceleration compared to previous investments and announced plans, adding approximately $39 billion in spending and 1,000 jobs annually. The new $100 billion investment announcement brings Apple's total commitment to $600 billion. The previously planned $500 billion investment reportedly included a new server manufacturing facility in Houston, a supplier academy in Michigan, and strengthened collaboration with existing US suppliers.
However, Trump's tariff policy still poses numerous challenges for Apple. Trump plans to impose a 50% tariff on India, a major Apple production market, with half of the tariff effective after midnight and the other half later this month. This is intended to punish India for purchasing Russian energy. Furthermore, Trump may announce separate tariffs on all products containing semiconductor chips as early as next week. Most iPhones sold in the US are manufactured in India, while the majority of Apple products, including Apple Watches, iPads, and MacBooks, are manufactured in Vietnam, which is subject to a 20% tariff.
Despite the significant investment pledged by Apple, it still falls short of the full shift to US production that Trump and White House officials desire. Earlier this year, Trump threatened to impose tariffs of at least 25% if Apple did not move iPhone production to the US. Cook responded by stating that final assembly of iPhones "will be elsewhere for some time," but emphasized that some components are already produced in the US, a move Trump expressed satisfaction with.
From a macroeconomic and industrial perspective, Trump's tariff policy aims to reshoring US manufacturing, create more domestic jobs, and reduce trade imbalances. However, this policy could also escalate global trade tensions and impact the global supply chains of multinational companies like Apple. Apple's investment decision is a strategic adjustment under tariff pressure, attempting to maintain its own market competitiveness and industrial layout while meeting policy requirements.
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