President Donald Trump and Apple CEO Tim Cook were talking tariffs over dinner last Friday night at the president’s golf club in Bedminster, NJ. As expected, the conversation led to Cook expressing his concerns about how the tariffs would affect his business being that a large portion of Apple products are manufactured in China.
But another argument Cook made was that Apple would be at a major disadvantage to its biggest competitor, Samsung. Being that Samsung products are manufactured in South Korea and Vietnam, the company would not be subject to the impending tariffs on $300 billion worth of Chinese goods. Trump said Cook made a compelling argument and admitted “it’s tough for Apple to pay tariffs if it’s competing with a very good company that’s not [paying tariffs].”
The first round of tariffs is set to begin on September 1st, and will affect AirPods, Apple Watches, and HomePods—all of which will face a 10 percent import tax. Next up will be iPhones, iPads and MacBooks, scheduled to get hit on December 15th. The president decided to delay a portion of the tariffs to accommodate the holiday shopping season, but that’s still not good enough for Cook and for a lot of people. According to JPMorgan Chase, tariffs on Chinese goods could cost American families upwards of $1,000 per year. As for Apple, some analysts are estimating that production costs for the iPhone could spike as much as 14%.
But it seems that Cook is in good graces with the president, which might be good news for Apple. Following their meeting, Trump said he was thinking about their conversation, and said “I gotta help him out short-term because it’s a great American company.” He commended Cook for reaching out to him personally when he has an issue rather than going through a third-party. But if Trump has a short-term solution up his sleeve, it ought to be put in place fast seeing as we’re just a week away from the first set of tariffs.