[Global Focus] 'Lobbying God' Tim Cook Who Saw Through Trump... Saved Apple Again

Apple Gains 1-2 Months of Tariff Exemption
CEO Tim Cook Achieves Results Through Financial and Political Maneuvering
Stock Price Surges on Positive News, Exceeds $200 in After-Hours Trading

On the 11th (local time), the U.S. Customs authorities quietly announced a tariff exemption measure for electronic products such as smartphones. Although President Donald Trump reversed his stance two days after the announcement, stating "there are no tariff exemptions," it is clear that Apple has at least gained a month of breathing room. Contrary to expectations that tariff exemptions would be difficult to obtain during the second term, CEO Tim Cook saved the iPhone from the 'tariff hell.' Paul Ashworth, Chief North America Economist at Capital Economics, noted, "Tim Cook's successful case of securing an exemption for Apple's iPhone will ignite lobbying efforts by other companies."

Team Cook, Apple CEO, is speaking at an event held at the Cupertino headquarters in California on September 9 last year. Photo by AFP Yonhap News

Trump Reverses from 'Exemption' to 'No Exemption' in Three Days

According to the U.S. Customs and Border Protection (CBP), which disclosed some tariff exemption codes including smartphones, the exempted items include 20 categories such as smartphones, laptops, hard drives, semiconductors, memory chips, servers, and chip production equipment. The U.S. Wall Street Journal (WSJ) pointed out, "As a result, the iPhone, China's top export item to the U.S., was excluded from the 125% tariff imposition without prior notice." Amid weakened U.S. consumer sentiment, concerns over iPhone price hikes became a stumbling block. More fundamentally, the U.S. Treasury market turmoil played a key role. The British BBC broadcast analyzed, "This large-scale exemption is interpreted not as a tariff policy but as a measure to stabilize the financial market," adding, "Following Trump's tariff announcement, U.S. Treasury yields surged close to 5%, making policy retreat inevitable."

Immediately after the surprise announcement on Friday, foreign media unleashed sharp criticism such as "political favoritism for large corporations" and "principles are gone, only confusion remains." As criticism intensified, President Trump reversed his statement again two days later on the 13th. In a post on his social media platform Truth Social, he said, "I never announced tariff exemptions last Friday (April 11)," adding, "These products are subject to the existing 20% fentanyl tariff and are merely being moved to a different tariff category." This aligns with earlier statements such as Commerce Secretary Gina Raimondo's ABC interview, saying, "These (electronic) products are exempt from reciprocal tariffs but will likely be included in semiconductor tariffs applied within a month or two," and U.S. Trade Representative Katherine Tai's CBS interview, stating, "It's not that tariffs for reshoring (return of overseas companies) are not imposed, but simply that a different system applies to (electronic products)."

The Trump administration's principle of imposing higher tariffs on countries with larger trade surpluses with the U.S. was also shaken. According to estimates by research firm Capital Economics, after the tariff exemption for electronic products such as smartphones, the effective average tariff rate on all U.S. imports dropped from 27% to 22%. Although still higher than last year's average (2.3%), it decreased by 5 percentage points. About 23% of Chinese imports were exempted this time, reducing the nominal 145% tariff rate on Chinese goods to approximately 106%. So-called 'worst countries' with large trade surpluses with the U.S., such as Taiwan, Malaysia, and Vietnam, also benefited.

Tim Cook and Trump: A Close Honeymoon Relationship

Separately from the political crisis of the Trump administration, the market analysis suggests that Tim Cook's presence has grown stronger with the announcement of the iPhone tariff exemption. It is true that shareholders had high expectations for him. During Trump's first term, Tim Cook effectively deceived President Trump with a conciliatory strategy. Although Apple did not actually build U.S. factories during Trump's first term, Trump boasted that he had secured promises for "three factories." Apple also promised to relocate some MacBook manufacturing bases from China to the U.S., but ultimately did not fulfill the promise. This demonstrated an understanding of Trump's obsession with the 'political image' visible to the public. Trump referred to Cook as "one of the few CEOs who calls me directly to share opinions."

However, pessimism prevailed that the 'deceiving Trump' strategy would hardly work this time. President Trump himself officially announced a policy to impose tariffs on Chinese products "without exception." On February 13, he told reporters in the White House Oval Office that Apple would not receive tariff exemptions. He explained, "During the first term, Apple was allowed an exemption because Samsung was producing in Korea and did not have to pay taxes. The taxes were targeted at China, and Apple produced many products in China. So it was done that way, but otherwise, it would not have been fair." He emphasized again, "Now, it applies to everyone. This is much simpler and a better way."

CEO Cook has been quietly aligning with President Trump's agenda behind the scenes. In December last year, he had a private meeting with Trump at the Mar-a-Lago resort in Palm Beach, Florida. He also donated $1 million in a personal capacity for the inauguration on January 20. After Trump's return to the White House, Cook visited immediately. In line with the launch of Trump's second term, Apple promised $500 billion (about 713 trillion KRW) in U.S. investment and 20,000 jobs. However, the details are limited to investments in a Houston data center and artificial intelligence (AI) infrastructure, essentially unrelated to relocating iPhone manufacturing plants. Nevertheless, on February 21, Trump boasted, "Cook came to the White House Oval Office the day before and said he would invest hundreds of billions of dollars in the U.S. and relocate factories from Mexico to the U.S." He still claims, "Apple invests as much because it believes it can manufacture in the U.S."

At the same time, CEO Cook is quietly attempting changes without provoking Chinese President Xi Jinping. First, production bases are shifting from China to India and Vietnam. As of 2023, over 95% of Apple products, including iPhones, iPads, and MacBooks, were produced in China, but this has now dropped to the 80% range. According to U.S. Bloomberg News, the value of iPhones produced in India from April 2024 to March 2025 is expected to reach $22 billion (about 31 trillion KRW, factory shipment price), 1.6 times the previous year. The share of India-made iPhones globally has also increased to 20%. Simultaneously, Cook carefully maintains relations with President Xi Jinping. On the 23rd of last month, he visited Beijing to attend the China Development Forum (CDF) and met with Vice Premier Hu Chunhua and others. Analysts suggest that a complete break with China carries risks of political retaliation and business damage, so caution is exercised.

Unlikely to Abandon China-Centered Strategy... U.S. Relocation Also Challenging

However, in the IT industry, the consensus is that the Trump administration's hope to shift the core of iPhone manufacturing from China to the U.S. is realistically difficult to accept. Wedbush Securities analyst Dan Ives stated, "Producing iPhones in the U.S. would cost over $3,000 (4.28 million KRW), and the earliest possible time would be after 2028." The Pro Max model of the 'iPhone 16' series released last year already costs around $1,200. WSJ quoted anonymous sources saying, "CEO Tim Cook is considering relocating to the U.S., but it could take years."

The core issues are fundamental technology and skilled labor. The U.S. Associated Press cited reasons such as the decades-long supply chain built in China, lack of U.S. manufacturing infrastructure, and shortage of skilled labor and industrial agglomeration. "In the U.S., it's hard to fill even one room for tooling engineer meetings, but in China, you can fill several soccer fields," Tim Cook said in a 2017 interview with Fortune.

Eight years later, China has advanced not only in assembly capabilities throughout the entire process but also in fundamental technologies related to design and components. Although Secretary Raimondo simply stated plans to replace iPhone assembly with automation in the U.S., mentioning only the assembly part admits ignorance of China's advanced reality. Moreover, China remains a key market for iPhone sales. According to market research firm Counterpoint, Apple maintained a 14-17% market share in the Chinese smartphone market last year.

Despite the Trump administration's inconsistent tariff statements, the market seems to view the temporary smartphone tariff exemption as a positive development. Apple's stock rose sharply by 4.06% to close at $198.15 on the 11th. In after-hours trading, it rose more than 5% further to $208.94. The increase is expected to be reflected in the regular trading session on the 14th. However, this is still far below the early-year high of $243.85. The market capitalization is again approaching $3 trillion (4,280 trillion KRW).