Apple is hoping for a better 2017 after an embarrassing fall in dominance last year, but it is starting to look it might have found itself an enemy for all things Applish in the new president Donald (Prince of Orange) Trump.
Apple was a frequent target of Trump’s criticism on the campaign trail. He encouraged supporters to boycott Apple because of its encryption policies while also condemning the company for building its products overseas.
One of the few things we know about Trump’s stated economic and trade policies is that damaging large, multinational tech companies who don’t have a plant in the US is high on the agenda. Apple and any company that relies heavily on overseas manufacturing and the global economy and this is the same business model which will suffer.
Trump said that the aim was to get Apple to start building their damn computers and things in this country, instead of in other countries.
Things would be bleak had not Trump has backed away from or moderated his tone on some of the issues he brought up during the campaign. He didn’t jail Hillary Clinton and he backtracked on corporate lobbying – several of his cabinet represent big companies. But he did rather go on about Jobs’ Mob.
Trump claimed to have spoken to Apple CEO Tim Cook about building “a big plant in the United States” and about cutting taxes and regulations that would currently keep Apple from doing so.
Trump claims he’s going to get Apple to “build a big plant” in US. Apple will then be made an example of and it could avoid a huge amount of pain if it does what it is told.
Apple makes most of its gear through Chinese outfits Foxconn and Pegatron. Foxconn has already said it is investigating building a plant in the US. It probably will not create many jobs as the outfit has said that it wants to be nearly fully robotic. However, if Trump says that Apple’s tech is being made in the US he will use that to create a sound-bite win and hope the country are too think to notice that it has made no difference to jobs.
If Apple is clever, it will suck up more government money and maybe get a tax break or too to bring its cash pile to the US and have the phones made by Foxconn robots.
But Apple’s Tame hacks at the New York Times reported that Apple’ Chinese manufacturing arrangements would be nearly impossible to replicate elsewhere.
Cook also has a balancing act to play out if Apple wants to stay in the lucrative Chinese market. While the Chinese interest in Apple has fallen lately, the outfit did get its foot in the door.
Trump has hacked off China big time and appears to be itching for a trade war.
Trump has promised to impose a 35 percent import tax on American companies that manufacture their products in countries like China and Mexico. This will be increased to a 45 percent tax on all Chinese imports from the country, compared to an average tax rate of about three percent currently.
While this could jack up the price of consumer goods, particularly smartphones and other technology China has promised to retaliate by further raising prices.
Obama raised taxes on Chinese tyre imports to 35 percent and the country added between two and 21.5 percent to the taxes for cars imported from the US and caused hell for US companies trading in China.
If Trump follows through, China will buy Airbus instead of Boeing. US auto and iPhone sales in China will suffer a setback, and US soybean and maize imports will be halted.
Apple has promised to invest in China and Chinese companies in an effort to maintain good relations with the country, but if the Trump administration takes a hard line on China, the benefits that the company relies on to keep its costs down and margins high could evaporate.
Tim Cook the chief executive officer of one of the world’s most valuable companies still showed up to Trump’s tech summit in New York last month, despite looking less than pleased about it.
He explained his presence at the meeting to Apple employees in an internal memo saying that he had to show up because Governments can affect the company’s ability to do what Apple does.
This year we will see how much of Apple is going to go down in a blaze of Trump.