President says Apple CEO Tim Cook made a good case against tariffs
China remains at the center of President Trump’s economic and international affairs policies, including those focused on technology. After speaking with Tim Cook this week, Trump said the Apple CEO made a strong argument that the U.S. tariffs on Chinese-made products unfairly favor rival Samsung. Meanwhile, the president said he doesn’t want the United States to do business with giant Chinese tech company Huawei.
The Lowdown: The hundreds of billions of tariffs on an array of products and goods from China have been the subject of fierce debate, with critics noting that U.S. consumers, farmers, and companies are bearing the economic brunt of them, and that the tariffs are fueling rising recession fears. Also in the mix of the larger U.S.-China trade talks is Huawei, which lawmakers have long been suspicious of over its ties with the Chinese government.
The Details: The impact of the tariffs continues to ripple throughout the tech industry.
For example, Lenovo officials warned that imposing more tariffs would mean higher prices for laptops, mobile devices, and other products. The Trump administration has delayed tariffs on the bulk of another $300 billion of goods until December to ease the holiday shopping season for consumers. Apple’s Cook argued that the U.S. tariffs are hurting Apple in its heated competition with Samsung, a South Korean company whose products would not be impacted by the import taxes. Trump told reporters that Cook made a “very compelling argument, so I’m thinking about it.”
At the same time, Trump told reporters over the weekend that he doesn’t want to allow U.S. companies to sell products to Huawei. Lawmakers for years have seen Huawei and similar Chinese companies as national security threats over fears that the Chinese government may put secret back doors into Huawei products to steal secrets and spy on the United States. The Trump administration is considering extending a grace period for Huawei, enabling it to buy products from U.S. companies for existing customers. How Trump’s comments may impact the decision regarding an extension for Huawei is unclear.
The Impact: The tariffs could help drive prices for computers and similar tech products – many of which are made in China – higher, which would hit consumers, vendors, and their channel partners alike. In addition, the 800-point drop in the Dow last week and accompanying worries over a recession were partly driven by the economic uncertainty around the import taxes and ongoing U.S.-China trade talks. With new tariffs taking effect Sept. 1 and then Dec. 15, such concerns aren’t going away.
Background: The Trump administration has used tariffs as a cudgel against what the president has deemed unfair trade practices by China. U.S. officials have used them as a key part of trade negotiations, though China has retaliated by saying the country will import some products and services from other countries. U.S. lawmakers have put restrictions on Huawei in the past, though the president has raised the tech giant as another possible tool in the trade talks.
The Buzz: “Deputies both for the U.S. team and the Chinese team will be having a lengthy teleconference call, maybe more than one, in the next week or two to work out some new ground rules and topics, which we believe will then lead to a visit from the China team to Washington, D.C., which will then allow us to continue to negotiate forward,” said Larry Kudlow, director of the National Economic Council. “We are still talking to China. We are acting in our own interest.”
“At this moment, it looks much more like we’re not going to do business,” Trump said about Huawei. “I don’t want to do business at all because it’s a national security threat and I really believe that the media has covered it a little bit differently than that.”
Counterpoint: “The president has said repeatedly that he’s on the cusp of getting a deal,” Peter Buttigieg, mayor of South Bend, Indiana, and Democratic presidential candidate, told CNN. “The president has failed to deliver a deal, and I expect he will continue to do so.”