Why it matters: The Trump administration's tariffs on goods imported by the US in its trade war with China are going to hit Apple, among other companies, the majority of whose products are Chinese manufactured. Now, President Trump has said that he'll be thinking about these tariffs on Apple products after Tim Cook showed concern about competing with Cupertino's biggest rival Samsung, the South Korean conglomerate that, owing to a broader and diverse supply chain, will see a far less impact on its business compared to California-based Apple.
A 10 percent tariff on Chinese imported goods including smartwatches, smart speakers and Bluetooth headphones means bad news for US tech giants like Apple, whose Mac Pro could see "no tariffs" if Apple decides to produce it locally.
Although that in itself maybe impossible for Apple in its current state of business, the company pushed by the US-China Trade war has been looking to move some of its production outside of China. While its alternate manufacturing and business investments will take their time to mature, it's still heavily reliant on China for production.
The tariff situation, however, puts Apple at a disadvantage over Samsung, a topic that was recently discussed over dinner by President Trump and Apple CEO Tim Cook at the president's golf club in Bedminster, New Jersey.
According to CNBC, Trump said that Cook made a "good case" that it's difficult for Apple to compete with Samsung considering that the former isn't subject to tariffs as most of its manufacturing is in South Korea. "I had a very good meeting with Tim Cook," Trump told reporters. "I have a lot of respect for Tim Cook, and Tim was talking to me about tariffs. And one of the things, and he made a good case, is that Samsung is their number-one competitor, and Samsung is not paying tariffs because they’re based in South Korea."
Citing Tim's concerns, Trump said that "it’s tough for Apple to pay tariffs if they’re competing with a very good company that’s not. I said, ‘How good a competitor?’ He said they are a very good competitor. So Samsung is not paying tariffs because they’re based in a different location, mostly South Korea but they’re based in South Korea. And I thought he made a very compelling argument, so I’m thinking about it."
Samsung, which more or less competes with Apple in every tech segment, won't be subject to the import tariffs that are due to go into effect from September 1, affecting gadgets like the Apple Watch and Airpods while taxes on Apple's iPhone, iPad and computers are expected to go live by mid-December.