US President Donald Trump's fragile months-long drama with Apple Inc. and its chief executive, Tim Cook, reached a breakthrough late Wednesday when the president said he was "looking" to exempt the iPhone maker from a round of China tariffs.
"They have to handle Apple on a somewhat similar basis as they do Samsung," Trump said during a tour with Cook of an Austin, Texas manufacturing facility producing high-end Mac Pro computers. (Samsung Electronics is based in South Korea, which has a trade deal with the US)
The appearance was the first by the two influential figures on the Apple assembly line since Trump took office after campaigning against Apple's overseas manufacturing practices.
The campaign rhetoric contributed to a hot-and-cold rivalry with Apple and Cook on topics ranging from generating US manufacturing jobs to depending on China for Apple to manufacture almost all of its iPhones.
Since then, Apple has broken ground on a $1 billion manufacturing facility in Texas, and in February, Cook entered an advisory board of Trump administration for job training. Trump claimed that Cook had "promised me three large plants in 2017 - major, big, big."
The trip to Texas that took place while Trump's impeachment hearing unfolded in Washington highlighted Apple's push to seek further relief from US tariffs on Chinese imports and Trump's efforts to persuade US firms to add more domestic manufacturing jobs. Around 20 percent of the annual revenue from Apple comes from China.
Apple "has the most to risk if this tariff war doesn't see a settlement going on and is the poster child of this current trading scenario," said Wedbush Securities analyst Daniel Ives late Wednesday in a research note.
He predicts that an extra 10 percent tariff on China "would ultimately result in a 5 percent impact to (Apple's) earnings per share or about $0.50 for the FY20 if the tariff came into effect."
Exemptions to Apple "demonstrate that the next necessary step of China's strategy is multilateral cooperation," said MarketWatch's creator Jonathan D.T. Ward, a consultant focusing on the growth of India and China, and US-China global competition.
Late Wednesday, the Trump administration said it started granting exceptions from doing business with the Chinese telecom company Huawei Technologies Co. in its blacklist but did not mention that businesses were accepted.
Apple shares were slightly up in Wednesday's after-hours session and have risen this year by 67 percent. This year's S&P 500, on the other hand, is up 25 percent.
