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Trump tells Apple to shift production to US to avoid China tariffs

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
This AFP file photo taken on September 7, 2016, shows the Apple logo on the outside of Bill Graham Civic Auditorium in San Francisco, California.

US President Donald Trump has called on Apple Inc. to shift production to the US and out of China, reviving a longstanding criticism and pressuring the technology firm to help fulfill the administration’s economic goal of restoring American manufacturing.

In a tweet on Saturday, Trump said that if Apple wants to avoid tariffs on its products, it should make those devices in the US rather than China. “Start building new plants now. Exciting!” he wrote.

“Apple prices may increase because of the massive Tariffs we may be imposing on China - but there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China. Start building new plants now,” Trump wrote.

Apple, the world’s largest company by market valuation, said in a letter this week to the US Trade Representative that a proposed additional round of tariffs on $200 billion in Chinese imports would raise prices on some of its products, including the Apple Watch and the Mac mini.

"Because all tariffs ultimately show up as a tax on US consumers, they will increase the cost of Apple products that our customers have come to rely on in their daily lives,'' Apple said.

The presidential tweet was the latest salvo in a dispute between the Trump administration and companies that fear tariffs will hurt their business.

Trump has repeatedly blamed the offshoring of manufacturing by US companies and unfair trade deals with low-wage nations like China and Mexico for the massive US trade deficit and the loss of high-paying American manufacturing jobs.

The Trump administration recently imposed tariffs on $50 billion worth of imports from China, mostly equipment and material used by manufacturers and plans to add 25 percent duties on another $200 billion in the coming days.

Trump said Friday he would hit virtually all Chinese imports with tariffs if Beijing does not back down and take steps to reduce its $335 billion bilateral trade surplus with the US.

In response, China has implemented 25 percent import taxes on $50 billion worth of US goods.

Apple, which is based in Cupertino, California, is highly exposed to a trade war between the US and China. It makes many of its products for the US market in China.

Apple has been widely criticized by labor groups in the US for making most of its products in China. It has also come under fire for its offshore tax structure. The company has held billions of dollars in profits in Irish subsidiaries to pay little or no taxes to any government by using an unusual global tax structure.

US tech firms ask for protection from next Trump tariffs

On Thursday, four other major US tech firms also wrote a letter to the US Trade Representative, urging to be excluded from the next round of tariffs.

Dell, Cisco, Hewlett Packard Enterprise and Juniper Networks warn that the new tariffs will increase the cost of components that they buy from China and could result in job losses in the US.

China's trade surplus with the United States hit a record in August despite a decline in the country’s export growth. According to new figures released on Saturday, China’s surplus reached $31.05 billion, surpassing its $28.09 billion record in July.

Many observers say the US tariffs imposed on Chinese-made products are more than just trade friction between the two countries and are a disguise for high-tech hegemony.

They say the US wants to prevent China from challenging its digital supremacy, and will deliberately try to derail Made in China 2025 -- the industrial policy meant to establish China as a high-tech superpower.

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