In case you hadn’t noticed, the United States has a new leader — and President Donald Trump has a bone to pick with Apple. Several, actually.
Will Trump’s “America first” stance and pro-business policies help Apple or give Tim Cook a series of premium headaches? Cult of Mac editors Leander Kahney and Lewis Wallace come out swinging in this week’s edition of “Friday Night Fights.”
Lewis Wallace: Trump’s high-profile clashes with Cupertino might have jelly-spined leftists quivering with fear, but I for one think he might help make Apple great again. After eight years of Obama, Trump is the ultimate “think different” president.
Leander Kahney: Rubbish. It’s going to be a disaster. Believe me! A yuuuuge disaster!
Wallace: Obviously Trump’s intense focus on bringing manufacturing jobs back to America puts some heat on Apple’s current state of affairs. But do you think Apple actually prefers making (almost) all of its devices in China?
Kahney: Apple doesn’t prefer it, but that’s where the supply chain is. There’s a ton of complex factors, a major one being manpower. Even if all the factories were relocated here, there’s not enough engineers. So it would involve a huge education effort also.
Wallace: Great! Trump’s for education. Plus, his brash approach — big stick, probably backed with a juicy carrot — might give Apple extra incentives to bring some manufacturing back here. Surely U.S. workers can tend the inevitable iPhone-making robots as well as their Chinese analogs.
Kahney: That’s a good point. The problem is not China, but robots. Even if the factories were relocated to these shores, they’re increasingly automated. They won’t be bringing back boatloads of jobs.
Wallace: Even some Chinese manufacturers in the Apple supply chain are making noise about possibly opening up shop in America now, though. Wouldn’t that be bizarre? Still, this is one of the things I find most refreshing about Trump’s approach — he makes bold statements, and people seem to listen. It’s almost like all a president had to do was ask.
Kahney: We’ll see. There’s also talk of a trade war with China. Trump is threatening to put tarrifs on Chinese goods, and China is making noises about retaliating against iconoic american products, like Apple. And that won’t be good.
Wallace: Agreed. I guess I’m just glad to see somebody shaking up the system. I’d be extra-proud if the back of my iPhone said, “Designed by Apple in California. Assembled in America.” I’d pay a little extra, too. (Undoubtedly.)
Trump’s call for lowering corporate tax rates would be good for Apple as well, but his idea about a sort of “Ollie Ollie in come free” for repatriating foreign cash hoards at lower rates would be a dream for Cupertino, wouldn’t it? Bring back that $200 billion and change (or however big Apple’s cash stash is right now) at 10 percent? Everybody wins.
Kahney: No, not at all. That would be another disaster — except for Apple shareholders. Folks think Apple would invest the money in jobs and factories, but it will most likely be used to buy back Apple shares, benefitting no one but shareholders and Wall Street. That’s why we saw BlackRock up its AAPL investment today. The big hedge funds are salivating at getting a cut of that giant pile of cash.
Wallace: So what? What’s good for Apple, and for Wall Street, is good for America. Of course they’ll invest some of that repatriated cash into the U.S. economy. Maybe they’ll build a big, shiny Apple Car plant in the middle of burnt-out Detroit — and Trump will be there to cut the ribbon!
Kahney: Yeah, a car plant peopled by robots, like the Tesla plant here in California. Not that it’s a bad thing. Robot factories will bring good jobs for folks to maintain and oversee them, plus all the other jobs a robust robot industry will bring — programming, service, sales and support. But it’s not going to look anything like what Trump promised in his stump speeches
Wallace: It’s better than nothing. And don’t forget that 10 percent of Apple’s $200 billion cash pile is nothing to sniff at — that’s tax money going straight into the U.S. coffers.
Kahney: It should really be 25 percent — in line with the rest of corporate taxes. And I hate to say this, but I’m sure Apple will be able to weasel out of paying it. Or a chunk of it.
Wallace: Good god. I’m so sick of hearing all the socialists whining about the rich “paying their fair share” and on and on. This is what the European Union was hitting Apple with — and Apple was just playing by the rules.
Kahney: What? That’s not the case at all. Apple actively evaded its taxes in Europe. Hence the EU ruling it pay Ireland its fair whack — which was criminally low in the first place.
Wallace: Which Ireland denies. The whole EU “better living through bureaucracy” thing … I dunno. It’s fun to catch a plane and hop from Spain to Italy to Germany, but it sounds like there’s some serious top-down meddling. Hence Brexit. And whatever EU defection comes next.
Kahney: In fact, I’m more interested in the massive corporate tax overhaul the GOP congress is proposing. There seems to be some good ideas in there (yeah, it’s shocking I would say this, I know). But back to Trump. He might also get into a culture war with Apple. Tim Cook has been a vocal and active supported of LGBTQ rights, which might set him up for a confrontation with the new administration.
Wallace: I think it’s a false argument of the left. Trump is not anti-LGBTQ. He was probably for same-sex marriage before Hillary! Now Vice President Pence … who knows. But I don’t see Trump backing bigotry, no matter what the hysterics say. He’s focused on business, not gender politics.
Kahney: Trump already called for a boycott of Apple. What if he threatens to renew that call unless Apple brings manufacturing back here? It’ll be a holy shitstorm if he goes through with that.
Wallace: What do you mean, “Goes through with that?” It’s not like the president can enforce a boycott anyway. He’s got a big megaphone to be sure, but he didn’t even stop using an iPhone!
Kahney: Yeah, his tweets cause massive drops in companies’ stocks. He has the loudest megaphone in the land; it’s a powerful weapon if he decides to train his “beautiful” Twitter account on Apple.
Wallace: I guess. But I haven’t noticed too many people shying away from iPhones. Or Macs. Or AirPods. Honestly, how would a boycott of Apple even work? Which American-made smartphones are we going to switch to? Motorola’s grand experiment in U.S. manufacturing fizzled.
On the other hand, if Apple makes a few steps toward bringing at least some jobs back stateside, it’s a big PR win for the company. And for Trump. And for America. God knows Trump will take credit.
Kahney: I heard flip phones are making a comeback. Motorola can resurrect the Razr.
Wallace: Actual LOL. Frankly, I’m excited about Trump shaking up the business climate a little bit. Steve Jobs supposedly embraced conflict as tool for achieving results (as opposed to Tim Cook’s “boring” management style). And Trump is all about conflict and confrontation. Maybe it’ll come back into style.
Kahney: Let’s not forget the real reason Trump called for the Apple boycott, though. That was because of Apple’s refusal to install a backdoor into iOS at the FBI’s request.
Wallace: Oh, that’s right. Got a little carried away there trying to reverse the #AmericanCarnage.
Kahney: I might criticize Apple for its tax avoidance schemes, but I’m 100 percent behind Tim Cook’s stance on privacy. Although no one wants to aid terrorists, Apple is right to insist on watertight security. So much depends upon it. Opening a backdoor for the FBI would potentially open a backdoor for everyone, from cybercriminals to the new Trump administration.
Wallace: No argument there. Can you imagine the tweets? I mean, I’m down with Trump’s goal of eliminating radical Islamic terrorism — gosh, he even used that phrase in today’s inauguration speech! — but I don’t need Apple to dumb down security. There’s more than one way to skin a jihadi. I’m pretty sure we’ve got adequate measures in place without giving every script kiddie a free pass into our iPhones.
Kahney: Exactly my point.
Wallace: There’s one last impact of the Trump era that I see as a big positive for Apple: The culture wars are heating up to a rapid boil. I haven’t seen so many people so angry since the Reagan era. While I consider the protesters’ worries badly overblown, there’s no denying that you get your best art and music when creative types get their panties in a twist. Who wins in that instance? Apple Music!
Kahney: That’s right. Joe Strummer will come back from the dead. The Clash will reform and we’ll have four years — god forbid eight — of astonishing anti-Trump protest music. So maybe Trump won’t be so bad after all.