President Trump declared last Friday that Apple Inc. would not receive an exemption for paying the tariffs on the computer parts they will be ordering from China. These parts will be used to build the company’s signature Mac Pro. Trump also added that he was told about the company’s plan of building a plant located in Texas.
In one of his tweets, Trump said that the only way for the company to pay no tariff is to have their parts made in the state.
Last July 18, the tech giant made an inquiry to the office of U.S. Trade Representative if they can enjoy a 25% waive on the tariffs on 15 of the parts that they are importing from China. The public is encouraged to comment on the matter until August 1.
Later in an interview, the American president said that he thought the company had plans to open a plant somewhere in Texas. However, Trump failed to elaborate on this statement about how he heard about the plans or what it is he was talking about.
The Wall Street Journal published last June about the tech giant’s recent shift in its manufacturing location from Texas to China. The product emphasized in the change is the Mac Pro desktop computer.
During the publication, Apple released a statement saying all of its products, although engineered and designed in California, need high-quality parts which are imported from different parts of the world. They also emphasized how the “final assembly is only one part of the manufacturing process.”
Apple Representatives did not comment on the denial of their tariff relief as well as Trump’s idea of opening a plant in Texas. However, there was a visible decrease in the gains of the company’s shares after the tweet.
Tim Cook, CEO, announced on December 2013 to the world about their plans of building some of their products in Texas, particularly the Mac Pro. The company decided to publish this after being widely criticized for their decision to have their products assembled in “lower-wage countries.”
The company did not release figures for the sales of their Mac Pro. On the other hand, experts believe that unlike the company’s flagship product, iPhone, the Mac Pro is not a “high-volume seller.” With prices starting at $6000, the computer is aimed to be sold to professional users like music and movie producers.
The Trade War between the U.S. and China
As of now, the U.S. market has earned billions by imposing tariffs on many Chinese goods. Trump has also threatened to add another set of tariffs on Chinese goods worth $325 billion if the trade dispute drags on, affecting global chains and financial markets.
China is an important client to Apple Inc. because the country provides them with a massive market for its products. China is also the place where more of the Apple products are produced. In March, Apple Inc. reported that 18% of their total revenue was reeled in from Greater China.