President Donald Trump’s on again/off again friendship with Apple could switch to “off again” if he institutes proposed taxes on American companies that produce goods outside the United States.
Intended as an incentive to boost U.S. manufacturing, this would nonetheless hurt Apple — which produces the overwhelming majority of its devices overseas, mainly in China.
Trump described the proposal in an interview for the Fox Business Network, as reported by Reuters Thursday. Trump specifically mentioned Apple in his conversation about the tax.
“You know, if we wanted to put up our own border, like other countries do to us, Apple would build 100% of their product in the United States,” Trump said. “That’s the way it would work.” He continued: “One incentive, frankly, is to charge tax for them when they make product outside [America]. We don’t have to do much for them. They have to do for us.”
Trump vs. China: Apple gets hurt
The proposed Apple-punishing tax would be the latest in Trump’s clashes with China, which carries out much of the world’s contract manufacturing. Last year, the U.S. and China clashed over proposed import tariffs on products made in China. More recently, Trump has expressed his annoyance with China over its early handling of the coronavirus pandemic.
Apple produces the majority of its products in China. However, it also has growing manufacturing bases in India, Vietnam, and even a Mac factory in Ireland. Apple’s only U.S. factory is a Texas plant which builds Mac Pro computers. Trump toured the facility last year with Apple CEO Tim Cook.
Cook has previously said that there are no plans to start building the iPhone, Apple’s most popular product, in the U.S. But Apple is doing its bit to support homegrown industry. Its $5 billion Advanced Manufacturing Fund is a pot of money intended to help grow American manufacturing.