Apple avoids tariffs with US investment & Trump statue

Apple has once again demonstrated its strategic dexterity in navigating the volatile landscape of US trade policy, securing a crucial exemption from a potentially crippling tariff on semiconductors. The tech giant’s latest maneuver, which appears to have successfully placated former President Donald Trump, involved a significant investment pledge and a highly personalized gift.

On Wednesday, Trump announced that Apple would be spared from a threatened 100 percent tariff on semiconductors, a measure that could have drastically increased the global cost of iPhones. This exemption followed Apple’s commitment to boost its total investment in the US by $100 billion, alongside the presentation of a unique, custom-made statue to Trump. Crafted by Corning, an iPhone glass manufacturer and Apple’s partner in its US investment initiatives, the statue featured a large circular piece of specialty glass with a prominent Apple logo at its center. Designed by a former US Marine Corps corporal now working at Apple, and set on a 24-karat gold base, it bore a message signed by Apple CEO Tim Cook: “Made in America.” Cook noted that the distinctive piece originated from Utah.

This carefully orchestrated gesture seemingly yielded immediate results. Following the statue’s presentation at the Oval Office, Trump confirmed that “there will be no charge” for Apple or other companies establishing factories in the US when the chip tariffs are officially implemented.

The development marks a significant turn after months of escalating pressure from Trump, who had been vocal in his demands for Apple to shift iPhone manufacturing for the US market away from India and back to American soil. In April, Trump publicly vowed that his trade war would lead to “Made in America” iPhones. By May, his frustration with Apple’s global supply chain moves became evident, with Trump reportedly telling Cook during a Middle East tour, “We are not interested in you building in India,” despite analysts consistently stating that such a diversion would take years, if it were even feasible. The Trump administration, however, maintained its insistence, with then-US Commerce Secretary Howard Lutnick claiming Cook planned to deploy “robotic arms” to replicate China’s manufacturing scale and precision in the US.

While Trump had previously threatened a 25 percent tariff on Apple if it did not relocate manufacturing to the US, his tone on Wednesday was notably softened. After months of urgent calls for US-made iPhones, he merely stated that the agreement was “a significant step toward the ultimate goal of ensuring that iPhones sold in America also are made in America.”

For his part, Cook confirmed that certain iPhone components, including semiconductors, glass, and Face ID modules, are already produced domestically. However, he remained vague about a timeline for full US-made iPhones, indicating that “final assembly will remain overseas ‘for a while.’”

This latest interaction echoes a pattern established during Trump’s previous term, where Cook consistently employed a “charm offensive.” During that period, Apple secured tariff exemptions and avoided fully caving to demands for US-made iPhones through investment commitments. Notably, Apple did not follow through on all of its 2017 pledges, abandoning plans for three “big, beautiful” Apple plants Trump had announced, with only one facility ultimately built to produce face masks, not Apple products. Similarly, a 2019 tour of a Texas facility, which Trump suggested could be used for iPhone production, saw Apple commit only to building MacBook Pros there.

Apple’s current commitment of $600 billion in US manufacturing investments over the next four years aligns with its typical spending patterns, according to analysts, mirroring pledges made during both the Biden administration and Trump’s prior term. While Trump has warned that companies failing to honor their investment pledges could face retroactive tariffs, Apple appears to be proceeding with its usual business operations in the US, with iPhone manufacturing remaining offshore, seemingly without altering the current tariff landscape.

At this juncture, it appears Apple has once again successfully navigated political pressure, securing crucial exemptions without definitively committing to a US-made iPhone or undertaking significant new investments beyond its existing trajectory. As Nancy Tengler, CEO and CIO of Laffer Tengler Investments, observed, Apple’s recent actions represent “a savvy solution to the president’s demand that Apple manufacture all iPhones in the US.”