A call from Tim Cook helped convince Trump to introduce tariff exemptions

Does this mean that Tim Apple is "snippy"?

AppleInsider said:

CEO Tim Cook's working relationship with President Donald Trump has once again helped Apple escape issues in the U.S.-China tariff battle. Here's how.

Tim Cook [left], President Donald Trump [right]

On April 11, following after a week of increases to the import tariff for Chinese goods entering the United States, President Trump made an announcement. While many products would be affected by a high import tariff of 145% at the time, Trump decided he was giving a reprieve on a variety of tech products and components.

While the reprieve itself is not permanent, with a semiconductor tariff expected to arrive in the future, the exemptions were immediately helpful to Apple. Indeed, a few days later, Trump confirmed that he was in talks with Tim Cook, and that he "helped" him with the tariff exemption.

In a report from the Washington Post, it appears that Cook did play a part in the tariff changes becoming a reality.

Warnings and silence

Cook talked to Commerce Secretary Howard Lutnick earlier in April, two people familiar with the phone call told the report. The call was about the potential impact of tariffs on iPhone prices, and also involved other senior White House officials.

There was also a decision by Cook to avoid publicly discussing or criticizing Trump and his policies. This was despite other executives taking to television to denounce the tariffs.

At the end of the week, the Trump Administration decided to implement the exemption on products Apple manufactures in China and ships to the United States. The decision had a byproduct of helping other major U.S. tech firms who made similar products.

There apparently wasn't a complete agreement on the issue within the White House. Aide Peter Navarro allegedly wanted the tariffs to stay as they were without any electronics carveout.

The ol' Cook razzle-dazzle

The chief reason for Trump listening to Cook is because of his established relationship that has continued into the second term. Wilbur Ross, commerce secretary during Trump's first term in office, referred to Cook as "playing a very careful role" while being both very dependent on China and very important to U.S. interests.

Ross continued that Cook got respect from the White House because "he's not a public whiner, he's not a crybaby." As he had a voice of reality, Ross believed that it was unsurprising that Cook would be heard and his comments well received by the administration.

The repeated conversations and meetings with Trump, which have spilled over into the new term, as well as initiatives such as a personal donation to Trump's inaugural fund, have helped Cook stay an important person in Trump's eyes.

The Cook playbook has also been one that executives of other companies have also copied following that first term. This has included attempts by CEOs such as Nvidia's Jensen Huang and Google's Sundar Pichai meeting with Trump over the last few weeks, schmoozing to try and minimize the damage from Trump's policies.

Other major tech names have also attempted to make themselves more well known to Trump, all with the same motive to get into Trump's good books.

Not Apple-specific, but it is

Outside of comments from Trump himself that he was helping Cook and Apple, the White House has still worked to try and make it seem like it wasn't an Apple-specific exemption.

Lori Wallach, executive director of Rethink Trade at the American Economic Liberties Project, highlights how Apple has been the biggest beneficiary of the exemptions. Of seven tariff lines added after the April 2 exception list, Wallach points out that they all consist of products that Apple makes, but few others do.

For its part, the White House is running an investigation into semiconductors, as a means to appear above-board and not playing favorites.

White House spokesman Kush Desai insisted that there were no exemptions granted to benefit Apple or any other company specifically. The Administration is "taking a nuanced, strategic approach" on China, Desai continued.

Despite the pretense that everything is equal to all in the market when it comes to exemptions, the affair does demonstrate that Cook has led the way among other CEOs by cultivating a very beneficial relationship with the country's chief.
Read on AppleInsider

Well, considering that Apple is the 800 pound gorilla in the consumer electronics space, it will obviously benefit most from any tariff relief by virtue of its huge sales. As far as tariff exemption lines added that "consist of products that Apple makes, but few others do" that's not as favorable to Apple as it sounds. Look at smartphones: there's Apple, Samsung, Google and nobody else that matters. Similarly, with computers, you have a small handful of companies that matter and that's it. So I would imagine that Apple's primary competitors in every line are benefitting from the exemptions, too. 

Hate what Trump is doing or not, but Apple carries that much sway in the U.S. economy that I would expect Apple's CEO to have some kind of red telephone in his office with direct access to whatever President is sitting in the chair.  

charlesn said:

Well, considering that Apple is the 800 pound gorilla in the consumer electronics space, it will obviously benefit most from any tariff relief by virtue of its huge sales. As far as tariff exemption lines added that "consist of products that Apple makes, but few others do" that's not as favorable to Apple as it sounds. Look at smartphones: there's Apple, Samsung, Google and nobody else that matters. Similarly, with computers, you have a small handful of companies that matter and that's it. So I would imagine that Apple's primary competitors in every line are benefitting from the exemptions, too. 

For sure the temporary tariff exemptions are helping other companies which is why there was a broader market (and electronics sector) bounce after the White House announced the exemption.

Also, when the White House was escalating their retaliatory tariff snit with China, some other companies' stock prices got pummelled even worse than Apple. Notably Dell and HP share prices took massive beatings. We've also seen Nvidia take a beating even though their technology is not present in any currently marketed Apple device to my knowledge. Same with AMD and Intel.

However you're just looking at the top level label on the box. There are tons of components in all types of products. The tariff isn't just applied to the final assembled SKU.

Companies who are more focused on services (Google, Meta, Amazon, etc.) are less affected by technology hardware tariffs in terms of revenue but certainly those tariffs affect operations (the cost of doing business) in doing things like increasing the server costs in data centers, stuff like that.

In the end, nothing will be cheaper for Americans, everything will end up costing more. Tariffs are really just a federal sales tax without being a line item on a store receipt.

It’s important to remember even as Cook manages some carve-outs for Apple that the underlying tariffs will be devastating for all the other businesses that don’t get the exemptions. I listened yesterday to an interview with a man who runs a business making the things new mothers need for their babies. Sippy cups, strollers and the rest. The 145% tariffs mean that he and his competitors have all cancelled their orders for new supply. They’ve already absorbed the previous tariffs, and the new rate would make their wares unsalable. They have sixty days’ supply already here, and it takes at least 45 days from placing an order to receiving it at the port. He can’t get the manufacturing tools and machinery he’s invested in out of China to move a factory here. He can’t afford to start from scratch, and even if he did, building a factory takes years.