Apple CEO Tim Cook joined President Donald Trump in the Oval Office on Wednesday to pledge an additional $100 billion towards U.S. manufacturing. This commitment takes the tech behemoth’s total investment to $600 billion over the next four years, as it continues to evade hefty tariffs on its products that Trump had threatened earlier this year.
The announcement also encompassed the establishment of a new American Manufacturing Programme (AMP), with the aim of bringing more elements of Apple’s supply chain to the U.S., according to a White House official privy to the details.
During the event, Cook gifted Trump a unique 24-karat gold item, describing it as a one-of-a-kind piece. In May, Trump had threatened to impose a 25% tariff on iPhones if Cook did not relocate its manufacturing to the U.S. Industry experts suggest that the company’s negotiations with Trump and the substantial domestic investments are somewhat akin to a trade agreement, similar to those the president has brokered with foreign countries.
Despite Apple’s announcement earlier this year that it would construct a new factory in Texas by 2026 and employ 20,000 U.S.-based workers, iPhone production is unlikely to return to the U.S. As per Mashable, an iPhone manufactured in America would set customers back about $3,000.
Apple’s shares surged to a high of 3.6% on the day of the announcement, marking the most significant increase in roughly three months.
“President Trump’s America First economic agenda has secured trillions of dollars in investments that support American jobs and bolster American businesses,” White House spokesperson Taylor Rogers proclaimed.
“Today’s announcement with Apple is another win for our manufacturing industry that will simultaneously help reshore the production of critical components to protect America’s economic and national security.”
In a bold move, the president slapped a 100% tariff on all chips and semiconductors not manufactured within the US borders.
“If you’ve made a commitment to build or are in the process of building, as many are, there is no tariff, okay?” he declared.
“If, for some reason, you say you are building and you don’t build, then we add it up, it accumulates, and we charge you at a later date; you have to pay, and that is a guarantee.”
Apple recently disclosed an $800 million impact from tariffs during the June quarter, which was marginally lower than anticipated. Bloomberg reported that for its September quarter, Apple anticipates an additional $1.1 billion in costs.
Last week, CEO Tim Cook informed analysts that “the vast majority” of iPhones sold in the U.S. are assembled in India, while most other hardware products are produced in Vietnam. Unlike its rivals Microsoft and Google, who focus mainly on software, Apple’s revenue relies heavily on the sale of hardware such as phones, laptops, watches, and tablets.
“We obviously try to optimize our supply chain,” Cook told analysts, according to Bloomberg. “And ultimately, we will do more in the United States.”
However, shifting production away from China, India and Vietnam, where factories manufacture highly specialised gadgets and support thousands of workers, could prove an insurmountable challenge for Apple. Rather than this, Cook might seek to replicate his approach from Trump’s previous presidency: persuading the commander-in-chief to grant Apple products immunity from import levies.
Should these discussions prove unsuccessful, Apple is anticipated to witness its profit margins shrink and subsequently increase prices for customers purchasing its sought-after devices.