The much-awaited outcome from the Friday dinner ‘investment diplomacy‘ meet with Apple CEO Tim Cook turned out with the latter making ‘very compelling argument’ against tariffs, said President Trump.
In his tweet, Trump said that Cook spoke about Samsung being a competitor and having an advantage over Apple due to lower tariff base and production in South Korea.
‘Investment Diplomacy’ turns Compelling Argument Against Tariffs.
Behind the dinner was the tariff issue that will possibly hurt Apple as it sources its products mainly from China. These would attract 10% import duties but have been postponed for now, till December 2019 by President Trump.
According to the CNBC report:
“It’s tough for Apple to pay tariffs if it’s competing with a very good company that’s not,” Trump said.
However, there was no word from Cook nor any details about the investments which Trump is expected to have sought assurance about from Apple’s CEO.
Thus, Trump gave a statement stating that Cook argued against the high tariffs proposed and to rally his argument brought in its arch-rival – Samsung.
iPhones, iPads, and host of other retail goods will attract an additional 10% tariff as Trump wants domestic goods to be competitive, compared to imports from China, India and other countries.
High Labor & Production Costs Render American Goods Costly and Uncompetitive
All know that American costs of labor and production are very high due to high rates of hourly wages there. So, the price of goods produced in the USA is high compared to its imports from cheap labor destinations and sourcing. Imports attract lower tariffs from China, India, and South Korea, etc. In most of the cases, they get preferential treatment due to bilateral trade agreements between the US and its partner countries.
With added tariffs, Apple fears that its iPhones, iPad, and other products sourced from China will be rendered costly. Whereas its competitor, Samsung already has a significant share across the globe in the smartphone markets and incurs low sourcing and production costs.
The very fact of admission by President Trump regarding compelling arguments made against tariff imposition in December on Apple products, in particular, is indeed saving grace, in it all.
How and to what extent Trump would heed to those arguments extended by Cook is now to be seen in the coming days or months before December deadline of tariff imposition.
As hope floats for Apple and other US Companies, do you expect President Trump to cancel the tariff imposition stricture? Will, he bid for time to offer more than what can be expected to revive Apple’s fortunes?