Apple jumps after Trump says Apple and other firms that build in the US will avoid 100% chip tariff
Apple CEO Tim Cook announced an additional $100 billion investment in US manufacturing at the White House.
It looks like Apple CEO Tim Cook’s latest $100 billion US manufacturing investment was enough to get the president off his back.
“We’re going to be putting a very large tariff on chips and semiconductors,” President Trump said during the announcement at the White House yesterday. “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.”
The stock was up 3% premarket.
Cook unveiled Apple’s American manufacturing program to encourage production of more iPhone parts in the US, as well as agreements with a number of American companies, including Texas Instruments, Applied Materials, and Corning.
“For the first time ever, every single new iPhone and every single new Apple Watch sold anywhere in the world will contain cover glass made in Kentucky,” Cook said, after presenting the president with a 24-karat gold and glass statue with an Apple logo that he said was made in the US.
When asked about making the whole iPhone in the US — something analysts have said is impossible without raising the price substantially — Cook punted.
“Well, if you look at the bulk of it, we’re doing a lot of the semiconductors here. We’re doing the glass here; we’re doing the face ID module here. And so there’s a ton of it, and we’re doing these for products sold elsewhere in the world. And so there’s a lot of content in there from the United States,” Cook said. “The whole thing is just the final assembly.”
Apple said on its latest earnings call that it expects a $1.1 billion hit from tariffs this quarter, after spending $800 million in its June quarter.
While Apple will still likely have to pay other tariffs, including those for shipping finished iPhones from India, and anything related to the ongoing Section 232 investigation, the chip exemption was welcome news for Apple investors.
TSMC, Nvidia, Micron, and other companies that have made similar pledges to invest in US manufacturing during Trump’s term are also up this morning.
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