During his visit to Apple’s manufacturing facility in Austin yesterday, Donald Trump hinted at the possibility of tariff exemptions for Apple to negate Samsung’s cost advantage in the US. He expressed a similar sentiment in August this year after Tim Cook made a case that tariffs on imports from China will hamper Apple’s ability to compete with Samsung.
“The problem we have is you have Samsung. It’s a great company but it’s a competitor of Apple, and it’s not fair if, because we have a trade deal with Korea – we made a great trade deal with South Korea – but we have to treat Apple on a somewhat similar basis as we treat Samsung,” said Trump, according to media reports.
The crux of Apple’s argument is that most of its products sold in the US are manufactured in China, attracting tariffs levied by the Trump administration on Chinese imports. In contrast, Samsung doesn’t have to pay these tariffs on imports since its manufacturing bases are in India and Vietnam. Despite Apple’s insistence, market analysts are skeptical of the impact of these tariffs on Apple’s ability to compete with Samsung.
The Trump administration has already offered certain exemptions on computer parts to help Apple build Mac Pro computers in Austin, but the company is asking for more. Ever since the US Government imposed tariffs on imports from China, Apple is reportedly paying a 10% tariff on AirPods, Apple Watches, and other products that are imported to the US. The administration is planning to levy another round of tariffs on made-in-China products from next month, which will include, among other things, Apple’s iPhones as well.
Being a South Korean company, Samsung was able to avoid the hostility that many Chinese brands are facing under the current regime in the US. So far, neither Trump nor anyone from his administration has attacked Samsung. The Korean company has also tried to appeal to Trump by investing in a manufacturing facility in the US after he came to power.