Apple joins players like chips giant TSMC in placating Donald Trump and extracting carve-outs from his 100pc semiconductor tariff, with further $100bn in US investment.
Having already announced a headline figure of $500bn back in February, Apple gave Donald Trump another photo opportunity at the White House yesterday when Tim Cook met the president and announced an additional $100bn investment in US manufacturing, but if you look closer, this remains about iPhone components like it’s glass screens, and any commitment to making iPhones in the US is a long, long way off.
With Trump always on the lookout for headline opportunities that support his tariffs strategy, Apple and other players seem happy to oblige in a bid to placate him and evade his tariff wrath. And it is working. Yesterday Trump said thanks to US investment commitments, Apple will evade his threatened 100pc tariff on imported chips.
As usual, details were scant, but Trump had announced an approximately 100pc tariff in the import of semiconductors manufactured outside the US, as he continues his strategy of forcing major companies to invest in the US.
“We’re going to be putting a very large tariff on chips and semiconductors,” Trump said in the Oval Office on Wednesday afternoon, CNBC reported.
“But the good news for companies like Apple is if you’re building in the United States or have committed to build, without question, committed to build in the United States, there will be no charge,” he said.
In Taiwan, TSMC shares surged this morning as its minister in charge of the National Development Council, said TSMC is exempted from the 100pc chip tariffs because it has set up plants in the US. TSMC is the leading manufacturer in the world of the chips that are used in artificial intelligence (AI), with major clients like Nvidia, Apple and AMD. In March it announced a $100bn investment in the US that would include three new fabs.
Liu added that United Microelectronics, the country’s second largest chipmaker, could also mitigate the effect of tariffs thanks to collaborations with Intel.
Samsung too look set to evade the tariffs, with its ongoing commitments to investing in US manufacturing, and the South Korean company got a mention in Apple’s announcement, saying Apple would work with Samsung’s semiconductor facility in Austin, Texas.
“Apple is also working with Samsung at its fab in Austin, Texas, to launch an innovative new technology for making chips, which has never been used before anywhere in the world,” it said. “By bringing this technology to the US first, this facility will supply chips that optimize power and performance of Apple products.”
Back in the US Tim Cook, Apple’s CEO yesterday said he was proud to increase Apple’s investments across the United States to $600 billion over four years, and had some kind words for Trump.
“This includes new and expanded work with 10 companies across America,” he said. “They produce components that are used in Apple products sold all over the world, and we’re grateful to the President for his support.”
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