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In China Trade War, Apple Worries It Will Be Collateral Damage

72 points by Bhilai 8y ago

draw_down 8y ago
That’s a shame. Hell of a racket they had going there for a while, though.
izacus 8y ago
Oh I'm sure they can lobby/pay their way so they'll be exempt from tariffs and will get even greater advantage over competition with less cash on hand. Apple is really the last corpo we should be worrying about.
- melling 8y ago
  You didn't read the article? They already have assurances from the US that we won't add tariffs? "The Trump administration has told Mr. Cook that it would not place tariffs on iPhones, which are assembled in China, according to a person familiar with the talks who declined to speak on the record for fear of upsetting negotiations. But Apple is worried China will retaliate in ways that hamstring its business, according to three people close to Apple who declined to be named because they were not authorized to speak publicly."
  - glhaynes 8y ago
    Assurances from the Trump administration in particular aren't exactly iron-clad. EDIT: "Trump Trade Adviser Doesn't Know About an iPhone Trade Exemption" - https://www.bloomberg.com/news/articles/2018-06-19/trump-trade-adviser-doesn-t-know-about-an-iphone-trade-exemption https://www.bloomberg.com/news/articles/2018-06-19/trump-tra...
crb002 8y ago
OMG Apple might start paying US taxes. The horror.
- crb002 8y ago
  Queue the Hollywood accounting. Phones are imported for "$1" in return for Apple doing something with it's overseas hoard.
  - kzrdude 8y ago
    The word is "cue". > In the theatre or in a musical performance, a performer's cue is something another performer says or does that is a signal for them to begin speaking, playing, or doing something.
    - eric_h 8y ago
      True, but "queue" in this case conveys almost exactly the same meaning in a grammatically correct way.
- seanmcdirmid 8y ago
  Apple pays plenty of US taxes. They also pay Chinese taxes on money they make in China.
zajd 8y ago
Good, maybe they can stop shipping their jobs overseas to avoid environmental and labor regulations
godzillabrennus 8y ago
Trump is many things but a puppet to Apple is not one of them. Their business model will be hurt by his trade war. Maybe they’ll start investing in manufacturing elsewhere to mitigate their dependence on China. Australia has some major rare earth materials that could make it a good choice.
IBM 8y ago
>Apple’s primary leverage with the Chinese government is Chinese consumers’ love for Apple products, said Dean Garfield, head of the Information Technology Industry Council, a trade group that represents Apple and other tech companies. That's not Apple's primary leverage in China. It's the millions of workers they indirectly employ there.
- seanmcdirmid 8y ago
  I don’t think the Chinese government cares much about that, there are literally 10s of millions of migrant worker factory jobs like that, and Apple’s assembly business is probably seen negligible to the Chinese government. But in the other hand the Chinese government really really cares about keeping the middle class happy.
- stcredzero 8y ago
  The Chinese government could restrict iPhones, but they'd only be partially successful. Instead, they can make iPhones just a blingy platform on which to run WeChat and extort Apple into giving them user's data. The Chinese government wins.
- baybal2 8y ago
  You know, Mao carried very well for the ~60 to ~70 million Chinese bourgeoisie. So did Jiang when he decides to purge a cult in which was said one in 12 urban Chinese were members of. And now some think that they will stop at upsetting few exalted hipsters.
hello_1234 8y ago
Looking at comments above, I find it extremely disheartening about how bitter Americans have become. Why are people celebrating the downfall of Apple - the company that comprises 3.94% of S&P 500, and is probably the single biggest holding of 401K retirement accounts. No American benefits if Apple falls.
- stcredzero 8y ago
  > ...Apple - the company that comprises 3.94% of S&P 500, and is probably the single biggest holding of 401K retirement accounts...No American benefits if Apple falls. Is it too big to fall?
- zajd 8y ago
  Sure they do, these massive global tax evading tech conglomerates only benefit the most wealthy in America. PS only 32% of Americans have 401ks If Apple actually paid taxes on the money they made? If they didn't go over to china to pay cheaper labor and avoid enviromental regulations? Maybe you'd have a point. As is, they're just another parasite extracting as much wealth as they can in the name of creating the first quadrillionaire in history.
  - dmos62 8y ago
    These are valid points and I don't think this comment merits being down-voted, especially without any replies. Outright calling Apple a parasite might not be particularly tactful, but it's hardly deniable. In fact, even if some of these statements were doubtful or deniable, this comment shouldn't be down-voted. We don't down-vote based on whether or not we like a comment, but on whether or not a comment contributes to a discussion.
    - toasterlovin 8y ago
      To be honest, the person you're responding to either doesn't actually know much about Apple or is being disingenuous. Essentially everything they said about Apple is wrong: Apple pays taxes. Labor is cheaper in places other than China, but nowhere else has the ecosystem to support integration and assembly of consumer electronics. Apple is one of the few companies that is taking steps to ensure that their entire supply chain treats their workers well. And Apple has been an innovator when it comes to implementing environmentally friendly manufacturing practices and product packaging materials. Oh yeah, and they are making serious efforts to build enough renewable energy to offset their energy needs.
rubyn00bie 8y ago
Lol. I mean sure Apple could be stuck between a US/China tradewar... sure. But the affects on Apple, versus literally any other the business out there, of the trade war are going to be relatively minuscule. There will be thousands of smaller businesses on both sides that are affected and that likely have a much larger aggregate impact than one player-- even if it is Apple. Apple has money and margins, it would not be wise to underestimate the power of those two things in protecting their business. It'd be better if the NYT wrote a piece about a mid-size ($5m to $75m in revenue, 50-500 employees) businesses that can't lobby or fight back and the affect on them. /shrug
rdlecler1 8y ago
Cook doesn’t seem to be proposing a solution to China’s policies other than: more of the same.
mrybczyn 8y ago
Apple could single handedly bring the electronics industry back from the grave in North America. Maybe they should, instead of whining that their easy profits off of communist party handshake deals will vanish. When the president of the PRC visits America, he visits Apple and Microsoft... https://www.nytimes.com/interactive/projects/cp/reporters-notebook/xi-jinping-visit https://www.nytimes.com/interactive/projects/cp/reporters-no...
baybal2 8y ago
The article goes to great length to highlight Apple having lobbyists in Beijing. A fair question is why? Are they so afraid to send the message that they are powerless, and have zero control over them being or not being the next company to suffer Beijing's banhammer? I do remember, back in iPhone 5 days. It took only a single minor customs official to hold their entire initial shipment of few millions units hostage. Back then, it was said their entire legal team was sent to hold watch by the door of the bonded customs zone administrative building.

72 points by Bhilai 8y ago

That’s a shame. Hell of a racket they had going there for a while, though.

Oh I'm sure they can lobby/pay their way so they'll be exempt from tariffs and will get even greater advantage over competition with less cash on hand. Apple is really the last corpo we should be worrying about.

melling 8y ago
You didn't read the article? They already have assurances from the US that we won't add tariffs? "The Trump administration has told Mr. Cook that it would not place tariffs on iPhones, which are assembled in China, according to a person familiar with the talks who declined to speak on the record for fear of upsetting negotiations. But Apple is worried China will retaliate in ways that hamstring its business, according to three people close to Apple who declined to be named because they were not authorized to speak publicly."
- glhaynes 8y ago
  Assurances from the Trump administration in particular aren't exactly iron-clad. EDIT: "Trump Trade Adviser Doesn't Know About an iPhone Trade Exemption" - https://www.bloomberg.com/news/articles/2018-06-19/trump-trade-adviser-doesn-t-know-about-an-iphone-trade-exemption https://www.bloomberg.com/news/articles/2018-06-19/trump-tra...

crb002 8y ago

OMG Apple might start paying US taxes. The horror.

crb002 8y ago
Queue the Hollywood accounting. Phones are imported for "$1" in return for Apple doing something with it's overseas hoard.
- kzrdude 8y ago
  The word is "cue". > In the theatre or in a musical performance, a performer's cue is something another performer says or does that is a signal for them to begin speaking, playing, or doing something.
  - eric_h 8y ago
    True, but "queue" in this case conveys almost exactly the same meaning in a grammatically correct way.
seanmcdirmid 8y ago
Apple pays plenty of US taxes. They also pay Chinese taxes on money they make in China.

zajd 8y ago

Good, maybe they can stop shipping their jobs overseas to avoid environmental and labor regulations

godzillabrennus 8y ago

Trump is many things but a puppet to Apple is not one of them. Their business model will be hurt by his trade war. Maybe they’ll start investing in manufacturing elsewhere to mitigate their dependence on China. Australia has some major rare earth materials that could make it a good choice.

IBM 8y ago

>Apple’s primary leverage with the Chinese government is Chinese consumers’ love for Apple products, said Dean Garfield, head of the Information Technology Industry Council, a trade group that represents Apple and other tech companies. That's not Apple's primary leverage in China. It's the millions of workers they indirectly employ there.

seanmcdirmid 8y ago
I don’t think the Chinese government cares much about that, there are literally 10s of millions of migrant worker factory jobs like that, and Apple’s assembly business is probably seen negligible to the Chinese government. But in the other hand the Chinese government really really cares about keeping the middle class happy.
stcredzero 8y ago
The Chinese government could restrict iPhones, but they'd only be partially successful. Instead, they can make iPhones just a blingy platform on which to run WeChat and extort Apple into giving them user's data. The Chinese government wins.
baybal2 8y ago
You know, Mao carried very well for the ~60 to ~70 million Chinese bourgeoisie. So did Jiang when he decides to purge a cult in which was said one in 12 urban Chinese were members of. And now some think that they will stop at upsetting few exalted hipsters.

hello_1234 8y ago

Looking at comments above, I find it extremely disheartening about how bitter Americans have become. Why are people celebrating the downfall of Apple - the company that comprises 3.94% of S&P 500, and is probably the single biggest holding of 401K retirement accounts. No American benefits if Apple falls.

stcredzero 8y ago
> ...Apple - the company that comprises 3.94% of S&P 500, and is probably the single biggest holding of 401K retirement accounts...No American benefits if Apple falls. Is it too big to fall?
zajd 8y ago
Sure they do, these massive global tax evading tech conglomerates only benefit the most wealthy in America. PS only 32% of Americans have 401ks If Apple actually paid taxes on the money they made? If they didn't go over to china to pay cheaper labor and avoid enviromental regulations? Maybe you'd have a point. As is, they're just another parasite extracting as much wealth as they can in the name of creating the first quadrillionaire in history.
- dmos62 8y ago
  These are valid points and I don't think this comment merits being down-voted, especially without any replies. Outright calling Apple a parasite might not be particularly tactful, but it's hardly deniable. In fact, even if some of these statements were doubtful or deniable, this comment shouldn't be down-voted. We don't down-vote based on whether or not we like a comment, but on whether or not a comment contributes to a discussion.
  - toasterlovin 8y ago
    To be honest, the person you're responding to either doesn't actually know much about Apple or is being disingenuous. Essentially everything they said about Apple is wrong: Apple pays taxes. Labor is cheaper in places other than China, but nowhere else has the ecosystem to support integration and assembly of consumer electronics. Apple is one of the few companies that is taking steps to ensure that their entire supply chain treats their workers well. And Apple has been an innovator when it comes to implementing environmentally friendly manufacturing practices and product packaging materials. Oh yeah, and they are making serious efforts to build enough renewable energy to offset their energy needs.

rubyn00bie 8y ago

Lol. I mean sure Apple could be stuck between a US/China tradewar... sure. But the affects on Apple, versus literally any other the business out there, of the trade war are going to be relatively minuscule. There will be thousands of smaller businesses on both sides that are affected and that likely have a much larger aggregate impact than one player-- even if it is Apple. Apple has money and margins, it would not be wise to underestimate the power of those two things in protecting their business. It'd be better if the NYT wrote a piece about a mid-size ($5m to $75m in revenue, 50-500 employees) businesses that can't lobby or fight back and the affect on them. /shrug

rdlecler1 8y ago

Cook doesn’t seem to be proposing a solution to China’s policies other than: more of the same.

mrybczyn 8y ago

Apple could single handedly bring the electronics industry back from the grave in North America. Maybe they should, instead of whining that their easy profits off of communist party handshake deals will vanish. When the president of the PRC visits America, he visits Apple and Microsoft... https://www.nytimes.com/interactive/projects/cp/reporters-notebook/xi-jinping-visit https://www.nytimes.com/interactive/projects/cp/reporters-no...

baybal2 8y ago

The article goes to great length to highlight Apple having lobbyists in Beijing. A fair question is why? Are they so afraid to send the message that they are powerless, and have zero control over them being or not being the next company to suffer Beijing's banhammer? I do remember, back in iPhone 5 days. It took only a single minor customs official to hold their entire initial shipment of few millions units hostage. Back then, it was said their entire legal team was sent to hold watch by the door of the bonded customs zone administrative building.