Trump announces US$100 billion new investment pledge from Apple
The new pledge brings Apple's total investment commitment in the US to US$600 billion. Earlier this year, the company had announced it would invest US$500 billion and hire 20,000 workers across the country over the next four years.
The announcement centers on expanding Apple's supply chain and advanced manufacturing footprint in the US, but still falls short of Trump's demand that Apple begin making iPhones domestically.
"Companies like Apple, they're coming home. They're all coming home," Trump told reporters in the Oval Office, moments after Apple CEO Tim Cook gave him a US-made souvenir with a 24-karat gold base.
"This is a significant step toward the ultimate goal of ensuring that iPhones sold in America also are made in America," Trump added.
Asked if Apple could eventually build entire iPhones in the US, Cook noted that many components such as semiconductors, glass and Face ID modules are already made domestically, but said that final assembly will remain overseas "for a while."
While the investment pledge is significant, analysts say the numbers align with Apple's typical spending patterns and echo commitments made during both the Biden administration and Trump's previous term.
In May, Trump had threatened Apple with a 25 per cent tariff on products manufactured overseas, a sharp reversal from earlier policy when his administration had exempted smartphones, computers and other electronics from rounds of tariffs on Chinese imports. Trump's effort to reshape global trade through tariffs cost Apple US$800 million in the June quarter.
"Today is a good step in the right direction for Apple, and it helps get on Trump's good side after what appears to be a tension-filled few months in the eyes of the Street between the White House and Apple," said Daniel Ives, an analyst with Wedbush Securities.
"A SAVVY SOLUTION"
Apple has a mixed track record when it comes to following through on investment promises.
In 2019, for instance, Cook toured a Texas factory with Trump that was promoted as a new manufacturing site. But the facility had been producing Apple computers since 2013 and Apple has since moved that production to Thailand.
Apple continues to manufacture most of its products, including iPhones and iPads, in Asia, primarily in China, although it has shifted some production to Vietnam, Thailand and India in recent years.
Despite political pressure, analysts widely agree that building iPhones in the US remains unrealistic due to labor costs and the complexity of the global supply chain.
"The announcement is a savvy solution to the president's demand that Apple manufacture all iPhones in the US," said Nancy Tengler, CEO and CIO of Laffer Tengler Investments, which holds Apple shares.
Partners on Apple's latest US investment effort include specialty glass maker Corning, semiconductor manufacturing equipment supplier Applied Materials, and chipmakers Texas Instruments, GlobalFoundries, and Broadcom.
Apple shares closed up 5 per cent on Wednesday. Shares of Corning rose nearly 4 per cent in extended trading, while Applied Materials gained almost 2 per cent. (Reporting by Andrea Shalal, Nandita Bose and Arsheeya Bajwa; Additional reporting by Doina Chiacu and David Shepardson in Washington and Zaheer Kachwala and Akash Sriram in Bengaluru; Editing by Colleen Jenkins, Andrew Heavens, Deepa Babington and Leslie Adler)
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