Donald Trump praised Apple for its pledge to boost its investment in U.S. manufacturing by an additional $100 billion over the next four years.
Apple’s commitment to increasing its domestic investments comes as it seeks to circumvent the tariffs threatened by Trump. During a May revenue call, CEO Tim Cook cautioned that tariffs could lead to losses of up to $900 million in that fiscal quarter alone.
The president lauded the tech giant after Cook presented him with a U.S.-made souvenir featuring a 24-carat gold base in the Oval Office on Wednesday. He told reporters, “Companies like Apple, they’re home. This is a vital step toward ensuring that iPhones sold in the U.S. are also manufactured here.”
Cook mentioned that many components of the iPhone, such as glass, semiconductors, and Face ID modules, are already produced domestically. However, he noted that final assembly will remain overseas for the time being. Previously, he stated that this new investment would involve collaboration with ten companies across the U.S. that manufacture components for Apple products.
Apple previously announced a plan to invest $500 million domestically, which has now increased to $600 million. The company also intends to hire 20,000 workers in the U.S. over the next four years.
Recently, Trump has vocally criticized tech companies, with Cook pursuing a strategy to shift iPhone production to India to evade tariffs imposed by the Republican administration on China. On the same day the White House made its announcement, Trump raised U.S. tariffs on India from 25% to 50%.
While in Qatar earlier this year, Trump mentioned a “slight problem” with Apple during a conversation with Cook, indicating he didn’t want production to move to India.
India has incurred the president’s ire lately as he ordered an additional 25% tariff on the country, citing its use of Russian oil. This new import tax, set to be implemented over 21 days, could elevate total tariffs on Indian goods to 50%.
According to Reuters, Apple tried to preempt Indian tariffs in April by exporting as many as 1.5 million iPhones from the country to the U.S.
The iPhone is composed of parts sourced from multiple countries, with final assembly primarily taking place in China, making the company particularly vulnerable to Trump’s tariffs. A shift of production to the U.S. could significantly increase costs, as many analysts regard American-made iPhones as a pipe dream while Apple navigates the uncertain waters of Trump’s trade war.
Apple’s announcement of increased investment aims to enhance supply chains and advanced manufacturing capabilities within the United States.
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This latest pledge from Apple comes shortly after the company signed a $500 million contract with MP Materials, which operates the only rare earth mine in the U.S. This deal allows MP Materials to expand its Texas facility and utilize recycled materials to manufacture magnets vital for the iPhone.
During the recent investor call, Cook highlighted the various components produced in the U.S., such as glass displays and facial recognition modules, and indicated that there are plans to scale up production for additional components within the country.
“We’re doing more here, with about 1.9 billion chips now being produced in the U.S. We’re making progress,” Cook stated last week without going into further details.
Despite investors’ concerns regarding impending tariffs and a slowdown in adopting artificial intelligence, Apple’s latest revenue report indicates strong iPhone sales, surpassing Wall Street expectations year over year. Following news of Trump’s announcement, Apple’s stock, which had dropped significantly earlier this year, jumped over 5% on Wednesday.
Source: www.theguardian.com
