Apple wants U.S. trade officials to exclude the iPhone from President Donald Trump's latest round of proposed tariffs on Chinese-made goods, as the Silicon Valley giant looks to shield its core product from Trump's trade war with Beijing.
Apple contends that a tariff on the iPhone and its other devices, such as tablets and computers, would harm its standing in both the U.
S. and around the world. In written remarks sent to the U.S. Trade Representative, Apple says it's responsible for 2 million jobs across the United States and reminds the government it pledged to invest $350 billion in the U.S. over five years after Trump passed corporate tax reform in 2017."U.S. tariffs on Apple’s products would result in a reduction of Apple’s U.S. economic contribution" and "weigh on Apple’s global competitiveness," the company wrote in the comments, which were made public Thursday.
Apple has kept tariffs at bay in the past. The company successfully lobbied last year to have Bluetooth headphones and smart watches nixed from a list of goods that were slapped with a tariff of 10 percent, ratcheted up to 25 percent last month.
When it comes to the trade war, Apple's diplomacy is largely centered on its CEO, Tim Cook, who has directly engaged with Trump and his top aides. Last week, Cook stopped by the White House for a quiet visit that the president himself disclosed to reporters. The discussion included trade, according to the White House, but no details were disclosed.
The looming threat of additional tariffs came after Trump accused the Chinese government of backing out on agreements made during trade negotiations.
He has not yet announced when those tariffs, poised to affect $300 billion worth of goods, would go into effect, though he's said he will decide after meeting with Chinese President Xi Jinping at the G-20 summit in Japan later this month.Meanwhile, the U.S. Trade Representative is in the process of determining what goods will make the final list. USTR hearings that started Monday are giving companies and industries an opportunity to plead their case directly to officials. Apple did not request to testify.
If Apple isn't spared, the tariffs would strike a significant blow to the company's flagship iPhone, which accounted for more than 60 percent of Apple's sales last fiscal year. A new device can already set buyers back as much as $1,450, so tacking a 25 percent tariff on top of that would put them further out of reach for many consumers. And the tariffs could put Apple at a competitive disadvantage with other smartphone makers like Samsung that primarily make their devices in countries other than China.
IPhone sales have already been lower than expected in recent quarters. Earlier this year, Cook blamed the dip in part on the trade war with China, but also pointed to broader shifts in the global economy and consumers' habit of holding on to old phones for longer periods of time.
Apple has been uncomfortably lodged at the center of the trade war between the U.S. and China because both countries are critical to its operations. The company's products are largely manufactured in mainland China and exported to the United States, its most lucrative market, and other countries around the globe.
But Cook has publicly expressed optimism that the world's two largest economies will come to an agreement — and he has privately engaged with leaders in both countries.
He dined with Trump and First Lady Melania Trump at the president's Bedminster, N.J., golf course in August, and has been spotted sharing meals with presidential advisers Ivanka Trump and Jared Kushner. Last April, Cook met with Trump and National Economic Council Director Larry Kudlow in the Oval Office to discuss tariffs and other policies.
Cook told CBS News this month he was "proud to" engage with Trump on issues like trade and immigration because he does not believe in shunning those with different political views.
"I think we've had very straightforward discussions, many of them. He listens to the comments, which I appreciate," Cook said. "Sometimes he doesn't agree. But my philosophy on things is that, you always engage, even when you know that you're gonna wind up on very opposite sides."
Article originally published on POLITICO Magazine