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1 Month : From Nov 2019 to Dec 2019
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 email@example.com and Tripp Mickle at Tripp.Mickle@wsj.com
(END) Dow Jones Newswires
November 20, 2019 19:36 ET (00:36 GMT)
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