US President Donald Trump's escalating trade war with China will make it harder for Apple to compete with Samsung. That was the basis of Apple CEO Tim Cook's message to Trump when the two had dinner on Friday, according to Trump. Apple would be hit by new tariffs set to come into effect Sept. 1 because its products are largely made in China, while Samsung would avoid such a hit thanks to its manufacturing taking place mostly in Vietnam, India, Indonesia and other countries.
"I had a very good meeting with Tim Cook," Trump told reporters Sunday. "Tim was talking to me about tariffs. And one of the things, and he made a good case, is that Samsung is their number one competitor, and Samsung is not paying tariffs because they're based in South Korea."
He continued: "It's tough for Apple to pay tariffs if they're competing with a very good company that's not. I said, 'How good a competitor?' He said they are a very good competitor. So Samsung is not paying tariffs because they're based in a different location, mostly South Korea but they're based in South Korea. And I thought he made a very compelling argument, so I'm thinking about it."
A new round of tariffs on Chinese imports is set to go into effect Sept. 1, raising prices on some electronics by 10%. That, according to Reuters, may include Apple's popular AirPods and Apple Watch. Apple's most lucrative products, like MacBooks, iPads and especially iPhones, would be spared, but these may be included in a new set of tariffs to be introduced on Dec. 15.
Trump, meanwhile, has called for Apple to build its devices in the US. Apple does the majority of its research and development in the US, but assembles the bulk of its devices overseas. This appeared to be his preoccupation prior to his meeting with Cook on Friday, as he tweeted, "Having dinner tonight with Tim Cook of Apple. They will be spending vast sums of money in the U.S. Great!"
The US signed a new trade deal with South Korea last year, in which electronics remained free of tariffs. Samsung has production plants around the world, in countries like Vietnam, Indonesia, Brazil and China. However, it has been scaling down its dependence on China, closing down two phone production facilities in 2018. Just one remains in the country.
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