Trump escalates feud with Apple, threatens France
Published 12:00 am Saturday, July 27, 2019
- President Donald Trump speaks to reporters outside the White House on Wednesday afternoon, July 24, 2019. Trump said on Friday, July 26, that his administration would deny a request by the electronics giant Apple to avoid stiff tariffs his administration had placed on Chinese imports, the latest attempt by the president to force a multinational company to move its manufacturing to the United States. (Pete Marovich/The New York Times)
WASHINGTON — President Donald Trump said Friday that his administration would deny a request by electronics giant Apple to avoid stiff tariffs the United States had placed on Chinese imports and threatened to hit France with heavy tariffs in response to a new digital tax that will affect U.S. tech companies.
Trump’s comments underscore the extent to which the president is wielding tariffs to punish not only trading partners but also U.S. companies that manufacture products overseas. Trump has increasingly used tariffs to extract concessions over a range of issues, including those unrelated to traditional trade practices. In June, he threatened to tax all Mexican imports to resolve an immigration dispute.
Trump tweeted Friday morning that Apple “will not be given Tariff waiver, or relief, for Mac Pro parts that are made in China” and that the company should “Make them in the USA, no Tariffs!”
Trump has placed tariffs on $250 billion worth of Chinese goods, including semiconductors, televisions and ball bearings. While the president insists the tariffs are being paid by China, U.S. companies — which import both finished products and materials from China — are facing increased costs as a result of the trade war.
To help cushion the blow, the administration established a process that allows companies to apply for an exemption from the tariffs. Companies must demonstrate that the import cannot be obtained domestically. Some of those requests have been approved, and administration officials have insisted the process is apolitical.
Apple products, which are largely assembled in China, have so far mostly evaded tariffs. Last year, the Trump administration told Apple’s chief, Tim Cook, that it would not place tariffs on iPhones, according to a person familiar with the talks who spoke on the condition of anonymity for fear of upsetting negotiations.
It is unclear if the president’s thinking has changed.
Last week, Apple filed 15 requests with the U.S. trade representative to exclude certain products it imports from China from the tariffs. The requests covered a variety of imported components, like power cables and circuit boards, used in the Mac Pro desktop, a high-end computer that sells for around $6,000. In the requests, the company asserts it cannot acquire the products in the United States or other countries outside China.
“There are no other sources for this proprietary Apple-designed component,” the company wrote.
But Trump has shown little sympathy for U.S. companies that insist they must manufacture or obtain their products abroad. He has blasted companies like Harley-Davidson that have shifted some production outside the United States and suggested that he will use tariffs on trading partners to force more manufacturing back to the United States. Last year, Trump placed tariffs on imports of steel and aluminum from Japan, Canada, Mexico and the European Union, saying that would lead to a resurgence of U.S. metal manufacturing.
On Friday, Trump threatened to punish France with tariffs, including taxing French wine, as retaliation for a new digital tax that President Emmanuel Macron of France signed into law Thursday. That provision falls heavily on U.S. technology firms like Facebook, Google and Amazon.
“France just put a digital tax on our great American technology companies,” the president wrote on Twitter. “If anybody taxes them, it should be their home Country, the USA.
“We will announce a substantial reciprocal action on Macron’s foolishness shortly,” the president added. “I’ve always said American wine is better than French wine!”
Speaking at the White House later, Trump expanded on that threat, calling France’s tax “wrong” and saying his administration was working on a possible wine tax.
“I’ve always liked American wines better than French wines. Even though I don’t drink wine. I just like the way they look,” he told reporters.
The Trump administration announced this month that it had started an investigation into whether the French measure, which places a 3% tax on the revenue some companies earn from providing digital services to French users, amounts to an unfair trade practice.
If the administration determines that the tax is an unfair trade practice, it would have the go-ahead under U.S. trade rules to slap retaliatory tariffs on France, though France could always challenge such a step at the World Trade Organization.
In a statement Friday, a White House spokesman said that the United States was “extremely disappointed” by France’s decision to adopt the tax.
“The Trump administration has consistently stated that it will not sit idly by and tolerate discrimination against U.S.-based firms,” Judd Deere, a White House spokesman, said in a statement.
If the president taxes French wine, he may face accusations of a conflict of interest. The president’s son Eric Trump oversees the Trump Winery outside Charlottesville, Virginia, and business entities associated with the winery were included in President Trump’s 2015 financial disclosure form.
Trump’s declaration that Apple’s exemption request would be denied also runs afoul of the U.S. trade representative’s posted rules for exclusions from the Section 301 tariffs on Chinese imports.
Guidelines published by the agency say the trade representative “will evaluate each request on a case-by-case basis, taking into account the asserted rationale for the exclusion, whether the exclusion would undermine the objective of the Section 301 investigation and whether the request defines the product with sufficient precision.” They allow 14 days after a request is posted online for anyone to submit comments in support or opposition of the request, and then give the original requester another seven days to respond.
Apple’s requests were posted July 18.
Agency officials did not immediately respond to a request for comment Friday.
Apple declined to comment. In the past, the company has called itself “an engine of economic growth in the United States.” Last year, it spent $60 billion with 9,000 U.S. suppliers, helping support 450,000 jobs.