President Donald Trump. Photo / AP
President Donald Trump said Friday that his administration would deny a request by the electronics giant Apple to avoid stiff tariffs his administration had placed on Chinese imports, the latest attempt by the president to force a multinational company to move its manufacturing to the United States.
Trump said on Twitter 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 comments underscore how Trump, who has imposed tariffs on US$250 billion ($376.7b) worth of Chinese goods, is using levies to punish not only China, which he considers a top economic rival, but also American companies that manufacture goods there.
Trump has placed tariffs on a wide range of Chinese goods, including semiconductors, televisions and ball bearings. While the president insists the tariffs are being paid by China, American 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 an exemption from the tariffs. Companies must demonstrate that the import cannot be obtained domestically. Administration officials have insisted the process is apolitical. Some of those requests have been approved.
Apple products, which are 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 the condition of anonymity for fear of upsetting negotiations. It is unclear if the president's thinking has changed.
Last week, Apple filed its first request for 15 exclusions with the US trade representative. They include a variety of imported components, like power cables and circuit boards, used in the Mac Pro desktop, a high-end computer that sells for around US$6,000. In the requests, the company asserts 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.
Trump's declaration that the request would be denied runs afoul of the US 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 case-by-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." They allow 14 days after a request is posted online for anyone to submit comments in support or opposition of the request, and 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 past, the company has called itself "an engine of economic growth in the United States." Last year, it spent US$60b with 9,000 American suppliers, helping support 450,000 jobs.
In the 1980s, Steve Jobs, the Apple co-founder, wanted to make Apple computers in the United States. He was fascinated with manufacturing trailblazers like Ford and Sony, and wanted to pave new ground for American manufacturing with a California factory that churned out the new Macintosh computer. Apple built the state-of-the-art plant in 1983.
"It wasn't great for business," said Randy Battat, a former Apple engineer. The factory closed in 1992, in part because sales of the Mac computer never met the company's expectations.
Apple later discovered that outsourcing its manufacturers would be far cheaper and faster and provide it with more flexibility when sales fluctuated. Cook, Jobs' deputy, helped build the company's sophisticated global supply chain, which 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.
But Apple's dependence on China has, at times, caused problems. It has drawn scrutiny of Apple's use of low-wage labour and elicited criticism from some customers and politicians.
So in 2012, Cook announced on prime-time television that Apple would make a Mac computer in the United States — the first Apple product in years to be manufactured by American workers. The US$3,000 Mac Pro would come with an unusual inscription: "Assembled in U.S.A."
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 materials were regularly out of place. Most important, the team struggled to get the parts they 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 came from China.
Last month, news broke that Apple would manufacture its new Mac Pro in China.
The president has long pushed Apple to make more of its products domestically. He and Cook met at the White House in March, in a meeting in which Trump famously called Cook "Tim Apple" as television cameras rolled.
Written by: Jim Tankersley and Jack Nicas
© 2019 THE NEW YORK TIMES
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