A second term for Donald Trump could bring significant challenges for Apple. If his trade policies are fully implemented, they may severely impact the tech giant. However, will CEO Tim Cook’s diplomatic skills help mitigate the damage?
Tariffs and Diplomacy: What “Donald Trump 2.0” Might Mean for Apple
An iPhone 16 Pro with 128 GB of storage currently retails for $999 (excluding US sales tax). Under Donald Trump’s latest campaign pledge of imposing a 10 per cent tariff on all imports, plus an additional 60 per cent on goods from China, its price in the US could rise by around $260. A similar scenario arose when Trump first took office in 2017; large-scale tariffs were slapped on imports from China, but smartphones—particularly iPhones—were spared, thanks in part to Apple Chief Executive Tim Cook’s lobbying efforts. Yet with Trump’s return to the White House, Apple’s fortunes may be tested once more.
iPhone Tariffs Under Threat
- Initial Trade War
- During Trump’s 2017–2021 presidency, the US enacted sweeping tariffs on products from China, targeting roughly two-thirds of Chinese imports.
- Although consumer goods were affected, smartphones were oddly exempt—a result of intensive lobbying by Apple and US technology associations. The logic: a punitive import tax on iPhones could push consumers to rival brands like Samsung (with manufacturing plants in Vietnam, India, and other non-Chinese locations).
- Potential New Levies
- Trump’s recent statements suggest a 10 per cent universal tariff, plus “more than 60 per cent” on imports from China—likely enveloping the iPhone.
- Apple’s ability to shield the iPhone from additional charges is unclear this time, given the scale of proposed tariffs.
- Manufacturing Outside China
- Apple has begun diversifying production beyond China—e.g., in India and Vietnam—particularly after supply-chain disruptions in the pandemic.
- However, it remains heavily reliant on Foxconn’s vast “iPhone City” in Zhengzhou, employing over 300,000 staff. Indian and Vietnamese facilities mostly handle older models and lack sufficient capacity for Apple’s flagship devices.
Apple’s Diplomatic Dance
Trump and Tim Cook’s Relationship
- 2019 PR Visit
Apple famously hosted Donald Trump at its Mac Pro factory in Austin, Texas. The event showcased “US-based manufacturing,” though in reality it was a niche product with modest volumes. - Diplomatic Coup
When Trump mistakenly referred to Cook as “Tim Apple,” Cook sportingly changed his Twitter handle briefly to “Tim ” instead of complaining. This gesture and Cook’s subsequent personal interactions helped Apple secure exceptions to tariffs that threatened iPhones.
Elon Musk and Shared Interests
- Musk’s Political Stance
After endorsing Trump’s 2024 campaign with hefty donations, Elon Musk remains opposed to further China tariffs—Tesla’s Shanghai plant is crucial to his EV production. - Discord on Social Issues
Apple strongly backs LGBTQ+ rights, whereas Musk’s stance under X (formerly Twitter) has alarmed many progressives. However, both figures converge on free trade and skilled immigration, highlighting the complexities of their alliances.
The Looming Antitrust Cases
- US DoJ vs Apple
- In March 2024, the Department of Justice and 15 states filed suit against Apple over alleged monopolistic practices in smartphone markets—namely restricting competitor access to iPhone hardware and software.
- Apple moved to dismiss, though the outcome is pending.
- Google’s Legal Issues and Apple
- Another major DoJ antitrust case targets Google’s default search deals, including a lucrative arrangement with Apple (reportedly $20–25 billion per year).
- Should the deal be invalidated, Apple stands to lose a huge slice of pre-tax profit. Trump has repeatedly castigated Google for “bias” and threatened severe action, but also hinted that breaking it up might be an overreach.
- Staff Turnover
- A Trump victory in 2024 means new leaders at the Justice Department and the Federal Trade Commission (FTC). Lina Khan, the current FTC chair known for tough stances on Big Tech, would be replaced—potentially softening enforcement.
- Andrew Ferguson is mooted as the next FTC chief, seeking to roll back “Khan’s anti-business agenda.” At the DoJ, the prospective “tech czar” Gail Slater has previously advised the administration on technology matters—some see her as business-friendly.
Conclusion
With Apple still dependent on large-scale China manufacturing, Trump’s trade threats could push iPhone prices significantly higher if those devices lose tariff exemptions. Meanwhile, Apple is also embroiled in major antitrust cases that might hinge on new presidential appointments. Tim Cook’s personal diplomacy with Trump may help defuse some tension, but the outcome remains uncertain—particularly given Elon Musk’s role and the complexities in any US–China economic clash.
Should Apple face a substantial import tariff, the company’s strategic reliance on China becomes even more precarious, despite expansions in India and Vietnam. At the same time, Apple banks on persuading the White House to go easy on the DoJ’s antitrust stance. One thing is certain: a second Trump term would be a test of Cook’s lobbying skills—and Apple’s ability to adjust swiftly in the face of unpredictable policy swings.