President Trump rejected Apple Inc.’s bid to avoid tariffs on some computer parts it manufactures in China, tweeting Friday that the company should instead make the components in the United States.
The Cupertino, Calif., technology giant has asked the Trump administration to exclude key components that make up the forthcoming Mac Pro high-end desktop computer from 25% import tariffs, weeks after it was reported that the company was planning to relocate production of the line to China from Texas.
An Apple spokesman declined to comment, but the company previously has said that “final assembly is only one part of the manufacturing process.”
Trump later told reporters that “we’ll work it out” and that “I think they’re going to announce they’re going to build a plant in Texas.” Apple hasn’t announced plans to assemble products in Texas but has said it would expand its local headquarters in the state.
The new Mac Pro will be manufactured in China, a person familiar with the company’s plans told Bloomberg last month. Apple’s request for a tariff exemption confirmed that plan. The previous design had been built in Texas since 2013, making it the only major Apple product exclusively built in the United States. The new model was announced in June and is slated to go on sale this year, starting at $5,999.
Apple filed requests for exclusions from the 25% tariff on 15 components or products. There’s an open comment period until Aug. 1 before the administration would consider the requests, and the company has seven days to reply to each comment.
Separately, Trump has encouraged Apple Chief Executive Tim Cook to move operations from China to the United States, Larry Kudlow, Trump’s chief economic advisor, told reporters Friday.
The Mac Pro historically has been one of Apple’s lowest-volume computers, and given its already high price, the tariffs on this particular product shouldn’t have a significant effect on Apple’s bottom line. The company is scheduled to report earnings Tuesday, and executives are likely to be asked about Apple’s supply chain in light of the U.S.-China trade war.
Apple is also seeking duty exclusions on its Magic Mouse and Magic Trackpad, complementary devices for operating the computer, as well as an accompanying USB cable for charging external mobile devices. Apple earlier had products spared from duties, including the Apple Watch and AirPods earphones, while the iPhone, the company’s core product, hasn’t yet been significantly affected.
Trump slapped tariffs on $250 billion worth of Chinese goods last year, launching a trade war over longstanding U.S. allegations of unfair economic practices, including the theft of U.S. intellectual property. After Trump threatened to impose tariffs on an additional $300 billion worth of Chinese goods, Apple said in a letter last month that the levies would affect nearly all major Apple products and reduce the company’s contribution to the economy. Those additional tariffs haven’t been imposed yet.
The Trump administration has previously promised relief if companies can show that parts or products can be obtained only in China, aren’t “strategically important” to Chinese industrial programs or that the duties would cause “severe economic harm.”
Apple shares slipped after the tweet and then regained the lost ground. They ended the day up 0.4%.