US President Donald Trump told a gathering of governors that Apple Inc chief executive officer Tim Cook plans to shift manufacturing from Mexico to the US, a move that the iPhone maker hasn’t publicly discussed.
Cook “stopped two plants in Mexico” and will build products in the US instead, Trump said on Friday, describing a meeting with the CEO at the White House the prior day. The president also said that Cook promised hundreds of millions of dollars in US investment.
“They don’t want to be in the tariffs,” Trump said.
Photo: Shawn Thew, EPA-EFE
It’s not clear what manufacturing facilities Trump was referencing, but Apple partner Foxconn Technology Group (富士康科技集團) has a large manufacturing presence in Mexico and has announced plans to expand its footprint there. Foxconn manufactures the iPhone in Asia, and Apple relies most heavily on China for production.
Trump told reporters later on Friday that he and Cook met at length.
“He’s going to start building,” Trump said. “Very big numbers — you have to speak to him. I assume they’re going to announce it at some point.”
Cook is among the tech industry leaders who have sought to nurture a close relationship with the US president since his reelection, attending his inauguration last month and traveling to his Mar-a-Lago estate in Florida during the presidential transition.
Cook’s company risks being caught in the middle of an escalating trade fight between the US and China, with Trump’s 10 percent tariff on Chinese-made goods posing a challenge for Apple as it seeks to address sluggish iPhone sales. China is weighing a probe into Apple’s policies and the fees it charges app developers. China is Apple’s biggest manufacturing hub, while the US is its largest market.
Apple doesn’t rely heavily on Mexico for production. The company has used suppliers — Molex LLC, Yageo Corp (國巨) and Skyworks Solutions Inc — to make some parts in the country, but most of its manufacturing happens in Asia.
One way that Apple is relying more on domestic production is through its partnership with Taiwan Semiconductor Manufacturing Co (台積電). That company is building factories in Arizona to make chips, including semiconductors for the iPad and Apple Watch.
During Trump’s first term, Cook was able to leverage his relationship with the president to win tariff carve-outs for its signature iPhone. But the US president has suggested that the company’s devices might not be so lucky this time as he seeks to impose sweeping new tariffs on imported goods, telling reporters that he’s looking to avoid exemptions.
Trump has also sparred with the company over its privacy policies, saying it should do more to help federal law enforcement access encrypted phones. Apple has resisted requests from law enforcement to build a backdoor into its phone operating system that would allow authorities to access data without a user’s password, saying that could leave phones vulnerable to hackers.
Taiwan’s government has pledged to help companies like Foxconn, also known as Hon Hai Precision Industry Co (鴻海精密), shift production lines in the aftermath of Trump’s executive orders imposing across-the-board 25 percent tariffs on Canada and Mexico. Trump has paused implementation of those tariffs for now, but said they could still go back into effect if he doesn’t see sufficient progress on immigration and anti-narcotic priorities.
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