Trump: No Tariff Waivers for Mac Pro Components (Update)

Updated, 7/31/19, 11:55 a.m. PT: During an earnings call on Tuesday, Apple CEO Tim Cook said the company wants to keep making the Mac Pro in the U.S. but isn't currently equipped to do so, according to The Verge. "In terms of the exclusions, we’ve been making the Mac Pro in the U.S.," Cook reportedly said. "We want to continue to do that. So we’re working and investing currently in capacity to do so, because want to continue to be here. And so that’s what’s behind the exclusions. So we’re explaining that and hope for a positive outcome." That would presumably include tariff waivers.

Cook didn't elaborate on Apple's plans for the Mac Pro's production. It's possible that Apple could manufacture some units in the U.S. and some in China, (which could help it avoid tariffs if it doesn't get an exemption or is only temporarily exempt). Either way, it's clear Apple won't accept U.S. President Donald Trump's statements on Twitter as the final word on the Mac Pro's exemption status.

Original article, 7/26/19, 10:10 a.m. PT:

Apple's request to exempt the new Mac Pro's power supply from tariffs on goods originating from China will be denied, U.S. President Donald Trump said today, before encouraging the company to manufacture its products in the U.S. instead of making them elsewhere.

Here's what Trump said in a tweet: "Apple will not be given Tariff wavers [sic], or relief, for Mac Pro parts that are made in China. Make them in the USA, no Tariffs!" It's not clear if that declaration is final. Tariff exemptions are handled via the the United States Trade Representative (USTR), which is part of the executive office, but regulatory actions haven't always aligned with Trump's statements.

Apple said in the application for tariff exemption that it can't source the PSU used in the new Mac Pro from anywhere but China. It also said the component "is not strategically important or related to 'Made in China 2025' or other Chinese industrial programs."

Yet, the company all but invited criticism for these claims by reportedly shifting production of the new Mac Pro from the U.S. to China in late June. The previous generation Mac Pro that debuted in 2013 was manufactured in the U.S. Apple revealed the next-generation Mac Pro during WWDC in June, however, and The Wall Street Journal reported soon after that the device's production would move to China. That meant the last major Apple product made in America would join the rest of the company's offerings in being manufactured overseas.

That shift had pretty bad timing, at least from a political standpoint, because the U.S. and China have been engaged in a trade dispute for months. Trump halted the expansion of tariffs in June, after saying that China President Xi Jinping agreed to more trade talks. But the current tariffs are still in place, and if those talks fall through like they did earlier this year, Trump could quickly expand the tariffs.

Reports have also indicated that Apple plans to move at least some of its production outside China. Foxconn has said that it could make the company's products outside the country, and its founder encouraged Apple to start manufacturing in Taiwan instead, so the company's reliance on Chinese manufacturing seems tenuous

Until there's an official statement regarding the Mac Pro's exemption status, however, it's hard to predict what might happen. Trump could simply be rallying support via social media; he could also be planning to make an example of Apple. What we do know is that Apple's application for tariff exemption for Mac Pro components is on the USTR website for public comment until August 1.