A file photo of Trump and Cook touring a manufacturing plant where Apple’s Mac Pros are assembled in Austin, Texas, on Nov 20, 2019. — The New York Times
I get lower tariffs, you get a new Mac: the art of the deal!
Apple CEO Tim Cook gifted former President Donald Trump a US$6,000 Mac Pro computer after the two men reached a deal for the tech giant to receive an exemption to a series of tariffs in 2019, according to Bloomberg.
At the time Apple and Cook were applying a charm offensive to persuade then-President Trump to remove tariffs on certain components that came from China. Cook asked Trump if he could meet him in person to make Apple’s case, a gesture the former president found “impressive”, he told Bloomberg. Trump was particularly pleased at the time that Cook reached out, especially considering his acrimonious relationship with other tech CEOs.
“Tim Cook calls Donald Trump directly,” Trump said in August 2019. “That’s why he’s a great executive, because he calls me, and others don’t.”
Shortly after taking office, Trump had imposed 25% tariffs on 10 parts used in building Mac Pro computers that came from China. The price increase meant potentially billions of dollars in additional costs for Apple, but when Apple first sought an exception on the trade tariffs, Trump responded with his usual obstinance.
“Apple will not be given Tariff waiver, or relief, for Mac Pro parts that are made in China,” Trump posted on X (still Twitter at the time). “Make them in the USA, no Tariffs!”
Eventually Apple and the Trump administration reached an agreement: The White House would grant Apple an exemption to the tariffs and Apple would build the computers in the US. Once the production lines were up and running, Cook gifted Trump one of the first Mac Pros built at the factory, according to Bloomberg.
The Mac Pro is Apple’s most powerful computer and generally targeted toward professionals who require large amounts of computing power. It is unclear what Trump did with the gift or how he reacted to receiving it.
Apple and the Trump campaign did not respond to a request for comment about the gift.
In Trump’s telling of the story, he induced Cook to increase Apple’s manufacturing footprint in the US in exchange for lifting the tariffs. “I said, ‘I’m gonna do something for you guys’,” Trump told Bloomberg, “‘but you have to build in this country’.”
In reality, the Mac Pro was already assembled in the US. However, Apple still gave Trump the appearance of strong-arming a Big Tech company when it announced a US$1bil investment in an assembly plant in Austin. Apple, though, was planning the investment a year earlier, before the dispute over the Chinese tariffs, according to Bloomberg. Nonetheless, Cook and Trump appeared together in November 2019 at the Austin assembly facility.
Observers at the time considered it a minor win for Trump – who got a photo op in an American factory – as well as for Cook – who skirted painful tariffs with a manufacturing investment that had already been in the works at Apple.
Apple and Cook may very well have to resort to the same playbook should Trump take office again. The former president has made no secret of his wish to impose even higher tariffs, up to 60% on any imports from China and 10% on imports from anywhere else. Economists consider the policy inflationary for the entire economy, and analysts believe it would be disastrous for Apple given its heavy reliance on China to manufacture many of its most popular products, like the iPhone.
As a likely contingency plan, Apple has been diversifying its production locations away from China. In April, during a trip across South Asia, Cook announced Apple planned to spend more with suppliers in Vietnam and Indonesia, although details were scant.
Still, given Trump’s desire to impose tariffs on any foreign goods, manufacturing in Vietnam or Indonesia as opposed to China would still result in a cost increase for Apple. For his part, Trump shows little intention on relenting when it comes to tariffs.
“I can’t believe how many people are negative on tariffs that are actually smart,” Trump told Bloomberg. “Man, is it good for negotiation.”
If Trump were indeed to win reelection and implement his tariff policy, Cook will likely bank on his cozy relationship with the former president, which earned him an exemption five years ago. Trump does seem to have a fair amount of goodwill for Cook, the chief executive of the world’s most valuable company.
“I found him to be a very good businessman,” Trump said about Cook. – Fortune.com/The New York Times
