The Trump tariffs could financially hit Apple's chip production partnership with TSMC, after the President insisted the import taxes will be applied to semiconductors and other specific industries in the near future.
During his re-election campaign, President Donald Trump pushed an agenda to bring more manufacturing to the United States via tariffs. While Apple has so far escaped the prospect of dealing with the tariffs directly, that may not last for long.
In a Monday speech at an Issues Conference at the Trump National Doral Resort in Miami, Florida, Trump discussed a range of topics, but spoke at length about tariffs.
After mentioning applying tariffs on vehicles imported from Mexico, Trump mentioned the placement of "tariffs on foreign production of computer chips, semiconductors," and pharmaceuticals. This is all in a bid to "return production of these goods to the United States," the C-Span video of the speech reveals.
"They left us and went to Taiwan, which is about 90% of the chip business," Trump insisted. "And we want them to come back." This refers to TSMC, the Taiwanese chip giant that Apple relies on for its chip production.
However, Trump wants to accomplish this using tariffs rather than incentives.
"We don't want to give them billions of dollars like this ridiculous program Biden has," Trump says, referring to the billions paid out from the Chips Act. This includes $6.6 billion awarded by the U.S. Commerce Department to TSMC in April to build another chip production facility in Arizona.
"They already have billions. They have nothing but money,. They needed an incentive and it will be they will not want to pay a tax," insisted Trump. "They will build a factory with their own money. They will come in because it's good for them."
Trump didn't offer any indication of how much the tariffs could be on chip imports.
An October report from the Consumer Technology Association proposed there could be three bands of tariffs, with 10% and 20% blanket tariffs expected along with a 60% tariff against China. The cost to consumers could involve price rises of 10.9% for accessories, 46% for notebooks and tablets, and 26% for smartphones, the report offered.
An Apple financial issue
Trump's commentary doesn't reference Apple directly, but the tariffs can have a considerable effect on its finances.
During the first term, CEO Tim Cook went to great lengths to work with Trump, which helped the company avoid the effects of tariffs against Chinese imports. Since Trump's re-election, Cook has already been working to charm the U.S. chief for similar aims.
This has included conversations with Trump before he stepped into office. These talks have evidently been to aid Apple in the future, as Trump boasted about the conversation in a victory rally.
"I spoke with Tim Cook of Apple," said Trump. "He said they're going to make a massive investment in the United States because of our big election win."
Cook's charm offensive may have helped sway Trump at the early stages, with no sign of China-specific tariffs being implemented in the early days of the term just yet. Tariffs are still expected to arrive at some point, with the later the better for Apple.
Apple has also worked to mitigate some of the effects of tariffs from the last time, with an expansion in production in other areas, such as India. At a minimum, if blanket tariffs are applied by the U.S., it will be less expensive for products imported from India than the high rate for China.
When it comes to U.S. production, Apple has already made some early moves to support that, especially when it comes to chips. TSMC's Arizona facilities, the Chips Act recipients Trump complained about, are already producing Apple's chip designs on U.S. soil.
67 Comments
Donald is a totalitarian fascist.
Americans vote3d him in because they are idiots.
He is a predator and will hurt America.
Tim's bribe will not end up looking good.
I despise Trump, but I also hate government handouts to massive companies. If this results in more manufacturing in the US, cool. If it results in higher prices for consumers in the US, oh fucking well. There are more important things than keeping the price of electronics low, and we should focus on those. (mass deportations, removing funding for scientific research, eroding away of checks and balances...)
The GOP is the tax cut/deregulation party. Trump's 1st term featured a $2 trillion stimulus in the form of a tax cut that primarily benefited the wealthy and corporations. And now you have Trump trying to claim he doesn't want to incentivize through tax breaks. It's so transparently false. That's all the GOP/Trump do: claim that tax breaks juice the economy. And it's guaranteed that they'll renew the $2 trillion in cuts from 2017 and add even more on top of it.
So the tech bros that paid millions to Trump (most of which went into his pocket) for favourable treatment are now going to realize that they got scammed. Scammed by a scammer that has made a career of scamming people. No surprise there. Will this hurt the US? Oh yes, badly. Not just these tariffs, but all the rest he’s pushing for. The US economy is going to be severely damaged, like 1930s level of damage. But to echo