Companies Test Apple's Playbook To Dodge Trump's New Tariff Regime

Yahoo

04-04-2025

Its "liberation day," the day Donald Trump has set to announce his reciprocal tariff plan on countries that levy duties on our exports and prolific import taxes on goods the Trump administration deems crucial to national security. Businesses are scrambling.
Since Softbanks early $100 billion investment announcement on Dec. 16, numerous other companies have followed, totaling $2.8 trillion in business projects and pledges in America. The most recent announcement was from Hyundai - on March 24, the Japanese automaker pledged $21 billion to the United States, including a $5.8 billion steel plant in Louisiana.
While these ventures are encouraging, its uncertain whether these companies are truly interested in bringing back Americas manufacturing base or simply eager to stroke the administrations ego and maintain the status quo: cheap foreign labor to maximize profit margins. These investments may be a form of lobbying to defend against Trumps tariff blitz - similar to the millions of dollars tech companies and their CEOs donated to the presidents inauguration fund. Either way, companies will find out what the future holds when Trump announces his reciprocal tariff regime this afternoon.
Tariffs give the federal government significant leverage in economic proceedings, and a firms goal is to protect its bottom line by delaying or exempting goods that will be affected by Trumps new global trade order. But are significant investments an effective playbook for transnational organizations? Apple is an interesting case study as it successfully parried several tariffs during Trumps first term.
Apple announced a $350 billion "contribution" to the American economy in January 2018. The company promised to create 20,000 jobs, spend $30 billion on new facilities, data centers, and offices, and invest $5 billion in its Advanced Manufacturing Fund. Apple also brought $245 billion in overseas profit back to the U.S. and paid $38 billion in taxes as part of the repatriation.
Did Apples contribution translate into new jobs? The short answer is "yes." Apples U.S. workforce grew by about 17,000 from 2018 to 2022. As for its Advanced Manufacturing Fund, Apple awarded $450 million to display glass supplier Corning from 2017 to 2021. Apple also gifted II-VI, an optical technology manufacturer headquartered in Saxonburg, Pennsylvania, $410 million in 2021 to expand its manufacturing capacity.
Apple avoided tariffs on its flagship product, the iPhone, for its efforts. In December 2019, Trump halted a 15% levy on China - the initially proposed "List 4B" tariffs would have affected the iPhone, iPad, and MacBook. Apple did not avoid all tariffs from the administration, however. The U.S. Trade Representative (USTR) did not grant relief for all of Apples requested components.
Not all companies fulfilled their investment promises. General Motors announced spending $1 billion to create or keep 1,500 manufacturing jobs in 2017. Yet, its U.S. workforce shrank during Trumps first term due to layoffs. In May 2019, the USTR denied GMs exemption request for the Chinese-made Buick Envision SUV for national security purposes.
Other companies, like Toyota, made investments and used them in a PR battle against the administration. In January 2017, Toyota announced a five-year plan to invest $10 billion and two years later, increased its investment commitment to $13 billion by 2021.
When Trump launched an investigation into the national security threat of Chinese car parts in 2018, Toyota nodded at its investments, stating it "operates 10 manufacturing plants in the U.S." and is "an exemplar of Americas manufacturing might."
Trump later declared that certain auto imports posed a national security threat in 2019. The company suggested that the presidents actions sent "a message to Toyota that our investments are not welcomed, and the contributions from each of our employees across America are not valued."
The second Trump administration is more bullish on tariffs than it was before. Howard Lutnick, Trumps Secretary of Commerce, called for the restructuring of global trade because we no longer need to aid countries devastated by World War II and the Korean and Vietnam Wars. Lutnick believes the Trump administration will cut the federal deficit through increased tariff revenue.
But how does that square with the tariff-fueled spoils system we saw during Trumps first term? And if Trump launches reciprocal tariffs, shouldnt he eventually lower them when our trading partners lower theirs? If this is the case, its unclear how the U.S. would gain enough revenue to reduce the federal deficit and bring back manufacturing jobs.
Companies arent waiting to find out. TSMC, Hyundai, Nvidia, and others seem to be imitating Apples campaign to minimize the financial impact of tariffs. These investments may translate into more American jobs, as Apples $350 billion contribution did, but will these companies get the tariff reprieve they crave? Apples playbook may have expired, but we wont know until Trump details his new administrations tariff policy on "liberation day."
Daniel Idfresne is a junior at Syracuse University. He's a Young Voices Social Mobility Fellow and interned for 'The Story with Martha MacCallum.' He has written for the New York Post, Newsweek, and The Free Press. Follow him at X.com: @danielidfresne