President Donald Trump is stepping up his pressure on Apple to manufacture its products in the US, amid proposed tariffs on imports from China that Trump acknowledges could raise prices on Apple products.
In a tweet Saturday, Trump admitted that "Apple prices may increase because of the massive Tariffs we may be imposing on China."
"But there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China," Trump tweeted. "Start building new plants now. Exciting!"
Apple prices may increase because of the massive Tariffs we may be imposing on China - but there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China. Start building new plants now. Exciting! #MAGA— Donald J. Trump (@realDonaldTrump) September 8, 2018
CRN USA has reached out to Apple for comment on Trump's tweet.
Apple has said that the Trump administration's proposed tariffs on US$200 billion worth of imports from China would raise the cost of doing business in the US, increase prices of its products for consumers and give a boost to foreign competitors.
Trump has reportedly said the US$200 billion in tariffs could be implemented very soon, while an additional US$267 billion in tariffs could be readied on short notice.
Final assembly of Apple products, including the iPhone, is carried out in China. Reports suggest that Apple has done a small amount of manufacturing in the US in recent years, including the manufacturing of Mac Pros in Texas and some iMacs in California, but on the whole Apple hasn't had major manufacturing in the US since 2004.
In July 2017, Trump claimed that Apple CEO Tim Cook had plans to build three manufacturing plants for Apple in the U.S. Apple has not commented on the claim.
In a letter to the US Trade Representative, Apple wrote that the proposed US$200 billion tariff proposed by the US affects not only Apple products imported into the US from China, but also much of the equipment that Apple uses internally to run its operations and data centres in the US.
Among the Apple-branded products that will be covered in whole or via certain components by the tariffs are the Apple Watch, Apple Pencil, AirPods, Mac Mini, and related adapters, cables, and chargers, the company wrote.
Also affected will be Apple-designed components and custom tooling for its US-based manufacturing and repair facilities, testing equipment for its development labs, and IT equipment for Apple's US-based data storage.
Furthermore, such tariffs will also result in lower US economic growth and higher prices for US consumers, Apple wrote. “More broadly, tariffs will lead to higher US consumer prices, lower overall US economic growth, and other unintended economic consequences,” the company said.
While the impact of tariffs is traditionally focused on exports from where the final assembly of a product is done, in China in this case, they do not reflect the value that Apple generates in the US, the company wrote.
"Every Apple product contains parts or materials from the United States and is made with equipment from US- based suppliers. And every one of these products reflects the labor of 2 million US workers across all 50 states, including our 80,000 direct employees, the 450,000 employees at our 9000 US suppliers, and 1.53 million US app developers. We expect our total direct contribution to the US economy over the next five years to exceed US$350 billion," Apple wrote.