Apple expands iPhone glass deal to avoid tariffs

The Star

2 days ago

WASHINGTON: Apple Inc chief executive officer (CEO) Tim Cook is using a familiar strategy to stay in Donald Trump's good graces: expanding existing initiatives to show he supports the president's 'Made in the USA' agenda.
Standing in the Oval Office on Wednesday between Trump and vice-president JD Vance, Cook announced that Apple would increase its US investment commitment to US$600bil over four years – up from the US$500bil pledged after Trump's second-term victory.
A centrepiece of the expansion is a US$2.5bil investment into Corning Inc, Apple's longtime glass supplier.
For the first time, the cover glass for all iPhones and Apple Watches will be manufactured in the United States, at Corning's facility in Kentucky.
Though Apple has touted the US roots of iPhone glass before, a portion of that glass was previously made overseas.
'Apple's been an investor in other countries a little bit. I won't say which ones, but a couple. And they're coming home,' Trump said when making the announcement. The US$600bil investment, he said, is 'the biggest there is.'
The iPhone maker also discussed increased agreements focused on semiconductor manufacturing, expanding deals with partners like Samsung Electronics Co, Texas Instruments Inc and Broadcom Inc.
Apple is branding the effort the American Manufacturing Programme, or AMP.
In all, the announcements provided just enough evidence that Apple was focusing on America – without forcing it to make major changes.
Corning has supplied Apple since the first iPhone in 2007, and Cook has long promoted the iPhone's American-made glass. What's new is the modestly increased scale.
Apple is pointing to the deals as it seeks relief from looming tariffs. The Trump administration is letting exemptions on smartphone and gadget levies expire and adopting new duties on Indian imports – a potential issue for Apple, which recently shifted US-bound iPhone assembly to India.
Cook even seized on Trump's famous love of gold. He presented the president with a large, circular Corning glass plaque engraved with the president's name, mounted in 24-karat gold.
The Apple CEO said that the glass came off an assembly line in Kentucky while the gold was produced in Utah. Cook added that a former US Marine who works at Apple designed the plaque.
Trump announced a major enticement – companies investing in the United States – even if the projects are in early stages, would get a break from some tariffs.
'The good news for companies like Apple is, if you're building in the United States, or have committed to build,' Trump said, 'there will be no charge.'
Apple's pledges are expected to meet that criteria, even if it isn't actually making iPhones and other popular devices in the United States.
Assembly of the smartphone – a costly and complex process of combining components, testing and boxing devices – will continue in China and, increasingly, India.
That part will stay 'elsewhere for a while,' Cook said. But 'there's a lot of content in there from the United States, and we're very proud of it.'
Trump acknowledged that assembly was 'set up in other places, and it's been there for a long time,' but he reiterated his desire to bring that stage of production to the United States someday.
'This is a significant step toward the ultimate goal of ensuring that iPhones sold in the United States also are made in America,' he said.
Trump's existing tariffs have already taken a toll on Apple.
It said last week that the levies would cost the company about US$1.1bil in the September quarter. But Apple is looking to avoid incurring further costs, especially as it prepares to unveil the iPhone 17 line next month.
Cook is also likely seeking support from Trump on other fronts: The US Justice Department is suing the company for alleged antitrust violations, and the agency is threatening its US$20bil search deal with Alphabet Inc's Google in a separate case.
The US government also could potentially help Apple cope with tough new restrictions on the App Store in the European Union.
This isn't the first time Apple has used US manufacturing announcements to promote Trump's priorities. In 2019, the company promised to assemble a new Mac Pro in Texas. It wasn't a big change: Apple had produced the previous model in the state since 2013. But that gesture helped land the company a reprieve from tariffs.
Earlier this year, after Trump's return to office, Cook unveiled the initial US$500bil commitment – an acceleration of the investments Apple had begun under President Joe Biden. At that time, Apple announced it would start making artificial intelligence servers in Houston. — Bloomberg