By Catherine Lucey and Tripp Mickle
AUSTIN, Texas -- President Trump criticized China's efforts to
reach a trade agreement during a visit to a Texas plant where Apple
Inc. is assembling its new desktop computer.
Mr. Trump toured the Austin facility with Apple Chief Executive
Tim Cook on Wednesday as the White House sought to promote job
creation and economic growth against the backdrop of a continuing
trade war with Beijing. Few signs of progress have emerged since a
plan for a limited "phase one" deal was announced nearly six weeks
ago.
Asked if he would secure a pact by the end of the year, Mr.
Trump said, "China would much rather make a trade deal than I
would" and added, "I haven't wanted to do it yet. Because I don't
think they're stepping up to the level that I want."
The president also said he was "looking at" exempting Apple from
a coming round of China tariffs. "We have to treat Apple on a
somewhat similar basis as we treat Samsung," he said.
Administration officials have for months discussed exempting
iPhones from tariff increases, according to people familiar with
the conversations. One rationale was that China's production was
deeply dependent on manufacturing and assembly in the country and
couldn't be expected to move operations quickly. Another was that
the U.S. didn't want to let Samsung gain an advantage over Apple
because of tariffs.
More significantly, the officials said, they wanted to avoid a
possible consumer backlash from a steep rise in iPhone prices.
Trump officials are trying to establish a level of tariffs they
consider politically sustainable.
South Korea-based Samsung Electronics Co., an Apple competitor,
has shifted its smartphone production out of China. Because the
devices are produced elsewhere, they aren't subject to tariffs on
China-made imports.
Mr. Trump's visit to the plant marked his first appearance with
Mr. Cook at one of Apple's assembly lines since the president took
office in 2017, after campaigning against the company's overseas
manufacturing practices. Mr. Trump observed the latest Mac Pro
being assembled and chatted with Mr. Cook and workers about the
process.
The Austin facility employs more than 500 people along a
1,000-foot production line, which Apple said is assembling the
$6,000 desktop computer to customer specifications.
Designed to highlight Apple's expansion plans in Texas, the trip
came on a critical day in the impeachment proceedings against Mr.
Trump over his efforts to pressure Ukraine to investigate a
political rival. Wednesday's hearings on Capitol Hill included
testimony from Gordon Sondland, the U.S. ambassador to the European
Union, who directly implicated the president in a campaign to
persuade Ukraine's leader to open probes that would benefit Mr.
Trump in his re-election bid.
Mr. Trump dismissed the inquiry from the factory floor, saying
he did nothing wrong and adding, "They have to end it now."
Messrs. Trump and Cook were joined by Treasury Secretary Steven
Mnuchin and the president's daughter and senior adviser Ivanka
Trump.
The appearance is the latest example of the close ties between
the U.S. president and the Apple CEO. Mr. Trump considers Mr. Cook
a friend and has hosted him for dinner in Bedminster, N.J. Mr. Cook
has served as an adviser to the Trump administration's workforce
policy board. The two have found common ground on taxes and trade,
although their views differ on immigration and environmental
issues.
Underlying the personal relationship is tension over Apple's
practice of making most of its iPhones, Macs and iPads in China.
Mr. Trump has placed tariffs on imports of Chinese-made goods and
encouraged companies to manufacture products in the U.S., but his
pressure on Apple to overhaul its supply chain has had limited
success.
Apple had planned this year to shift manufacturing of its new
Mac Pro computer -- at that point its only major U.S.-assembled
product -- to China. After the Trump administration in September
granted tariff exemptions on 10 items, Apple reversed course,
saying it would make the high-end desktop device in Texas, where it
has been working with contract manufacturer Flex Ltd. since
2013.
The company said it has invested more than $200 million in the
Mac Pro facility in Austin, though it declined to say over what
period. With the previous Mac Pro model in 2013, it reported an
investment of $100 million in tooling and other equipment.
Apple continues to produce high-volume products such as iPhones
and iPads in China, where the company says it indirectly accounts
for 3 million jobs through its supply chain. Those products are
designed and engineered in California.
The tariff exclusions don't apply to other Apple items facing
tariffs, such as the Apple Watch and AirPods, though the company
has sought more exemptions. Additional levies are looming in
December on iPhones and other products as Mr. Trump's trade
negotiations with China appeared to have slowed.
Ahead of the plant visit, the White House stressed Apple's job
creation in the U.S., citing the company's announcement last year
that it would build a second campus in the Austin area for 5,000
employees. Apple relies on 9,000 U.S. suppliers across 50
states.
Dow Jones & Co., publisher of The Wall Street Journal, has a
commercial agreement to supply news through Apple services.
Since the impeachment process began in late September, Mr. Trump
has held rallies, White House events and made official trips. In
October, he attended the ribbon-cutting for a new Louis Vuitton
factory in September.
The president and his advisers see job creation as a key
re-election argument heading into 2020. While the economy has
cooled, it is continuing to expand, with employers hiring and wage
growth ticking upward.
--Bob Davis contributed to this article.
Write to Catherine Lucey at catherine.lucey@wsj.com and Tripp
Mickle at Tripp.Mickle@wsj.com
(END) Dow Jones Newswires
November 20, 2019 19:36 ET (00:36 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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