The Bull

Saturday 18

August, 2018 4:53 AM



Apple CEO speaks out on escalating US trade war

Apple CEO speaks out on escalating US trade war

Tim Cook, CEO of Apple, took some time out from talking about beating earnings estimates to deliver a scathing assessment of the current US trade disputes with China.

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By Thomas Hudson 02.08.2018

Tim Cook, CEO of Apple, took some time out from talking about beating earnings estimates to deliver a scathing assessment of the current US trade disputes with China, saying that they amount to nothing more than “a tax on consumers”.

At present Apple is trying to find out if there is anything in its direct or indirect supply chains that could be negatively impacted by some of the measures being introduced by US President Donald Trump. Although Apple may have been fortunate thus far, it is not beyond the realms of possibility that it could face a hit from some of the tariffs in the pipeline.

Speaking on the rapidly developing trade disputes that have already shaken various US industries, Cook said that he hopes “calm heads would prevail”. He added that tariffs will not only have a negative impact on consumers but will also bring about “lower economic growth” with the potential for “unintended consequences”.

Although Cook confirmed that key Apple products such as the iPhone are as yet unaffected, the latest round of tariffs on $200bn of Chinese goods is set to include some electronic items. Apple is undergoing an evaluation process to determine the likelihood of the company having to find ways to deal with the unraveling issues of the back-and-forth trade disputes between two of the biggest economic superpowers.

Cook lamented the “tedious process” that makes this necessary, as it requires not only assessing which products the company sells that tariffs could affect but also the “purchases you’re making through other companies that are not related to revenue”. Cook then indicated that this could be related to information going through data servers and the like.

A report from press agency Reuters suggested that the latest round of tariffs could be set to hit the Apple Watch, in part due to an obscure classification choice by the US Customs and Border Patrol, but this is part of a list due for public comment later in the year.

According to the Consumer Technology Association, several types of import materials needed to manufacture popular items in the US could be under threat, including wearables, smart hubs, home Wi-Fi devices, wireless earphones and other smart devices.

Given that Apple currently manufactures and produces items that fit into several of these categories, it may come as little surprise that it is currently speaking out against Trump’s latest measures in an ongoing and increasing set of trade disputes. This is also the first time that one of the world’s biggest companies has used the stage to go into such detail and rail against government policy. It could easily set some sort of precedent, given that so many American companies will find themselves affected by tariffs.

When Trump met with Cook earlier in the year, he reportedly said that Apple would not face any tariffs on iPhones manufactured in China, and Cook reiterated in June that he still expected this to be the case.

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