TRUMP SAYS Apple request to avoid 25% tariffs on Chinese imports will be denied.
Weighing in on tariffs, he also threatens levy against France
WASHINGTON — President Donald Trump said Friday that his administration would deny a request by electronics giant Apple to avoid 25% tariffs the United States had placed on Chinese imports, and he threatened to hit France with heavy tariffs in response to a new digital tax that will affect U.S. tech companies.
The comments, made in a series of Twitter posts, show the extent to which the president is wielding tariffs to punish not only trading partners but also U.S. companies that manufacture products overseas. Trump has increasingly used tariffs to extract concessions over a variety of issues, including some unrelated to trade practices. In June, he threatened to tax all Mexican imports to resolve an immigration dispute.
Trump tweeted Friday morning that Apple “will not be given Tariff waiver, or relief, for Mac Pro parts that are made in China” and that the company should “Make them in the USA, no Tariffs!”
The U.S. has placed tariffs on $250 billion worth of Chinese goods, including semiconductors, televisions and ball bearings. While the president insists the tariffs are being paid by China, U.S. companies — which import both finished products and materials from China — are facing increased costs as a result of the trade war.
To help cushion the blow, the administration established a process that allows companies to apply for exemptions from the tariffs. Companies must demonstrate that the imports cannot be obtained domestically. Some of those requests have been approved, and administration officials have insisted the process is apolitical.
Apple products, which are largely assembled in China, have so far mostly evaded tariffs. Last year, the Trump administration told Apple’s chief, Tim Cook, that it would not place tariffs on iPhones,
according to a person familiar with the talks who spoke on condition of anonymity for fear of upsetting negotiations. It is unclear whether the president’s thinking has changed.
Last week, Apple filed 15 requests with the U.S. trade representative to exclude certain products it imports from China. The requests covered a variety of imported components, such as power cables and circuit boards, used in the Mac Pro desktop, a high-end computer that sells for about $6,000. In the requests, the company says it cannot acquire the products in the United States or other countries outside China.
“There are no other sources for this proprietary Apple-designed component,” the company wrote.
But Trump has shown little sympathy for U.S. companies that insist they must manufacture or obtain their products abroad. He has blasted companies such as Harley-Davidson that have shifted some production outside the United States, and he has suggested he will use tariffs on trading partners to force more manufacturing back to the United States. Last year, Trump placed tariffs on imports of steel and aluminum from Japan, Canada, Mexico and the European Union, saying that would lead to a resurgence of U.S. metal manufacturing.
On Friday, Trump threatened to punish France with tariffs, including possibly taxing French wine, in response to the digital tax that French President Emmanuel Macron signed into law Thursday. That levy falls heavily on U.S. technology firms such as Facebook, Google and Amazon.
“We will announce a substantial reciprocal action on Macron’s foolishness shortly,” the president added. “I’ve always said American wine is better than French wine!”
The Trump administration announced this month that it had started an investigation into whether the French measure, which places a 3% tax on the revenue some companies earn from providing digital services to French users, amounts to an unfair trade practice.
If the administration determines that the tax is an unfair trade practice, it would have the go-ahead under U.S. trade rules to impose retaliatory tariffs on France, though France could challenge such a step at the World Trade Organization.
Meanwhile, Trump’s declaration that Apple’s exemption request would be denied runs afoul of the U.S. trade representative’s posted rules for exclusions from the Section 301 tariffs on Chinese imports.
Guidelines published by the agency say the trade representative “will evaluate each request on a caseby-case basis, taking into account the asserted rationale for the exclusion, whether the exclusion would undermine the objective of the Section 301 investigation and whether the request defines the product with sufficient precision.” The rules allow 14 days after a request is posted online for anyone to submit comments in support or opposition of the request. The rules then give the original requester another seven days to respond.
Apple’s requests were posted July 18.
Agency officials did not immediately respond to a request for comment Friday. Apple declined to comment.
In the 1980s, Steve Jobs, the Apple co-founder, wanted to make computers in the United States. He was fascinated with manufacturing trailblazers such as Ford and Sony and wanted to pave new ground with a California factory that churned out the new Macintosh computer. Apple built the state-ofthe-art plant in 1983.
Apple later discovered that outsourcing its manufacturers would be far cheaper and faster and would provide it with more flexibility when sales fluctuated. Cook, Jobs’ deputy, helped build a sophisticated global supply chain that sources parts from around the world, including the United States, mostly for final assembly in China. The innovation was one of the keys to Apple’s enormous growth, and it helped elevate Cook to succeed Jobs as the company’s chief executive.
Apple’s dependence on China has, at times, caused problems. That reliance has drawn scrutiny to Apple’s use of low-wage labor and elicited criticism from some customers and politicians.
So in 2012, Cook announced that Apple would make a Mac computer in the United States — the first Apple product in years to be manufactured by American workers.
But manufacturing the Mac Pro near Austin, Texas, quickly turned out to be a headache.
Former employees who worked on the project said the plant was understaffed and that materials were regularly out of place. And the team struggled to get the parts it needed on time, such as tiny screws.
While China has a huge manufacturing infrastructure that can produce enormous quantities of parts overnight, the Mac Pro team was relying on a 20-employee machine shop in Lockhart, Texas, that could produce at most 1,000 screws a day.
The computer was delayed, and the screws eventually arrived from China.