Stratechery’s Ben Thompson warned that there would come a day when the bit got flipped.
From Monday’s daily update “Trump Orders Companies to Look for China Alternative, Apple’s Chokepoint, The Potential Tariff Impact” ($):
To date Apple has escaped tariffs on its finished products, but that ends September 1 when AirPods, the Apple Watch, and the HomePod will be hit by a 15% tariff (it was 10% before this weekend), along with a slew of accessories and computer parts (for repairs); cellular phones and laptops were granted a reprieve until December 15, and Apple CEO Tim Cook deserves the credit. From CNBC:
Apple’s iPhone was in line to get a 10% tariff starting Sept. 1, before Trump announced a temporary reprieve for laptops and cellphones, pushing the start date for the duties back to Dec. 15. According to Trump, Cook recently argued that the 10% tariff would be unfair to Apple, especially compared with its primary competitor Samsung, which does most of its manufacturing in South Korea. Trump suggested on Wednesday that Cook directly influenced the administration’s decision to waive the tariff on cellphones and laptops.
“The problem was that Samsung, a competitor, his competitor, wouldn’t be paying tariffs, and Tim Cook would,” Trump said. “I gotta help him out short-term, because it’s a great American company.”
There is a lot to unpack here. First, Trump’s personalizing of this issue is exactly what I was concerned about back in 2016 when tech executives, including Tim Cook, had that infamous meeting with Trump. Much of the reporting out of that meeting framed it as Trump rather harmlessly charming industry executives; my argument was that that was what was so concerning:
Right there in the first two paragraphs, are two Trump statements that should be deeply unsettling for those interested in defending the (small ‘l’) liberalism I discussed yesterday: “I’m here to help you folks do well” and “We’re going to be there for you”.
First off, these sorts of statements in fact are the threats the New York Times was apparently expecting: once you’ve introduced the idea of the President having a direct impact on the success of a particular company, it only takes the flip of one bit to realize the downside. Today Trump says he wants to “help”; there is nothing stopping him from tomorrow saying he wants to “hurt.”
Trump is, pretty clearly, actively helping Apple (I’d also add that the point about actively helping and hurting being two sides of the same coin is another piece of evidence that Trump’s antitrust policy is driven by personal favor or animus, not the facts). To that end, though, as worrisome as this might be for economic liberalism, Apple CEO Tim Cook deserves credit from shareholders at least for playing the game better than anyone. Trump declared that it was personal, and Cook took him up on it to a far greater degree than any other big tech executive.
My take: Thompson, as usual, sees things clearly. If you’re not a Stratechery subscriber, you don’t know what you’re missing.