Apple and President-elect Donald Trump are engaging in a surprising diplomatic relationship, a sharp contrast to the more distant stance when Trump first took office in 2016. This shift isn’t unique to Silicon Valley. The reason behind it is straightforward: Neither party wants Samsung to come out ahead.
Why it matters. While Trump has pledged aggressive tariffs against China, Apple’s stock continues to hit record highs. At first glance, this appears contradictory, but Wall Street understands the underlying dynamic.
Between the lines. Apple CEO Tim Cook recently dined with Trump, employing a tactic that proved effective in 2019. Back then, Cook presented a “very compelling” argument, in Trump’s own words: Tariffs would harm Apple while giving Samsung, which primarily manufactures in South Korea, a competitive edge.
- Trump found Cook’s argument convincing in 2019 and is likely to do so again.
- Protecting Apple aligns with national pride, even if it appears to be a trade policy issue.
- Cook has demonstrated exceptional skill in corporate diplomacy.
The bottom line. This scenario highlights how economic nationalism can be constrained by global market forces. Even the staunchest policies must adapt to the realities of competition.
While Trump wants Apple to reduce its reliance on Chinese manufacturing, he can maintain his anti-China rhetoric while safeguarding Apple’s interests. This tacit understanding benefits both sides:
- Trump claims a symbolic victory by backing an American company.
- Apple avoids supply chain disruptions and preserves its profit margins.
According to Deepwater Asset Management, the strategy also aims to protect other U.S. companies, such as Tesla, from Chinese competitors like BYD.
What’s next? As analysts suggest, the primary loser in this equation could be Samsung. The South Korean company may find its chief rival retaining competitive advantages while sidestepping new U.S. trade restrictions.
Trump’s approach will likely allow Apple to continue manufacturing in China while avoiding tariffs. This pragmatic twist underscores how business interests can shape policy in unexpected ways.
Image | Xataka On with Grok
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