Related articles
TMTPOST -- A top White House economic advisor on Tuesday said U.S. President Donald Trump doesn』t want to hurt Apple Inc. with hefty tariffs on iPhones days after he made a blatant threat to the tech titan.
Credit：Xinhua News Agency
National Economic Council Director Kevin Hassett played down Trump』s tariff threat, stating that companies tend to exaggerate the tariff impact on their bottom line when they want lower levies in negotiation.
「Everybody is trying to make it seem like it』s a catastrophe if there』s a tiny little tariff on them right now, to try to negotiate down the tariffs,」 Hassett said in a CNBC interview. 「In the end, we』ll see what happens, we』ll see what the update is, but we don』t want to harm Apple.」
Hassett stressed White House』s position that Apple should move its production back to U.S. as what the Trump administration is trying to do is onshore production as much as possible, so that the U.S. is not heavily dependent on imports from China. 「They need to move their stuff onshore as much as possible to make it so that the U.S. economy is secure and not prone to Chinese extortion,」 Hassett said.
Hassett claimed it is Apple, instead of consumers, that should bear the costs of iPhones, including possible tariffs. 「If you think that Apple has a factory some place that』s got a set number of iPhones that it produces and it needs to sell them no matter what, then Apple will bear those tariffs, not consumers, because it』s an elastic supply,」 he said.
Trump on Friday threatened he would levy 25% tariffs on iPhone to press Apple』s pivot from countries outside U.S. "I have long ago informed Tim Cook of Apple that I expect their iPhone's that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25 percent must be paid by Apple to the U.S.," Trump wrote in a post on his social media platform Truth Social.
Later Friday, Trump made the similar threat to other smartphone makers. "It would be more, it would be also Samsung and anybody that makes that product. Otherwise it wouldn't be fair," Trump told reporters at the White House when asked whether the president has the power to tariff one single company. "That'll start on, I guess, the end of June ... I think we have that appropriately done by the end of June," he continued.
A report from the New York Times on Monday suggested Apple CEO Tim Cook』s refusal of joining Trump』s visit to the Middle East triggered the president』s tariff threat. The White House had encouraged chief executives and representatives of many American companies to join Trump』s trip, but Cook declined, the report quoted people familiar with decision. It said Cook』s choice 「appeared to irritate」 Trump, noting Trump took a number of shots at the head of Apple during the visit.
In his speech in Riyadh, Trump praised Nvidia Corporation CEO Jensen Huang for traveling to the Middle East with the White House delegation, and then paused to single out Cook as a target. 「I mean, Tim Cook isn』t here but you are,」 Trump said to Huang.
Latter in Qatar, the president knocked Cook again. 「I had a little problem with Tim Cook yesterday,」 Trump said on May 15. 「I said to him, 『Tim, you』re my friend. I treated you very good. You』re coming in with $500 billion.』 But now I hear you』re building all over India. I don』t want you building in India.』」
If Trump is indeed threatening a 25% iPhone tariff because Cook didn』t join his Middle East trimp as the news said, 「it might actually be a good thing for Apple in the short term」, commented Ming-chi Kuo, a reliable Apple analyst who is well-known for his accurate predictions over a decade. The TF Inernational Securities analyst believed Apple could potentially delay any discussions and enforcement of iPhone tariffs by 「calming Trump』s emotions and shifting his focus eleswhere.」
Cook on May 1 warned the Trump administration』s tariffs could make a $900 million hit for the current quarter. 「For the June quarter, currently we are not able to precisely estimate the impact of tariffs as we are uncertain of potential future actions prior to the end of the quarter. However, for some color, assuming the current global tariff rates, policies, and applications do not change for the balance of the quarter and no new tariffs are added, we estimate the impact to add $900 million to our costs,」 Cook told analysts on an earnings conference.
For the June quarter, Apple expected the majority of iPhones sold in the U.S. Will have India as their country of origin, and Vietnam to be the country of origin for almost all iPad, Mac, Apple Watch, and AirPods products sold in the U.S., Cook spoke with analysts. He added that China would continue to be the country of origin for the vast majority of total product sales outside the U.S.
