Trump to offer Apple ‘large tax cut’ as incentive for the switch; Cook remains tight-lipped on the prospect, not promising anything to the President-Elect
A few days ago, we mentioned Apple mulling over something highly unlikely. Reportedly, Apple had asked its manufacturing partners Foxconn and Pegatron to look into the possibility of bringing product manufacturing to the United States. And it seems there was indeed some meat to the story.
In an interview with the New York Times, President-Elect Donald Trump clearly laid out a conversation he had with Apple CEO Tim Cook. This talk took place after the election. Trump told Cook that one of his major goals is to bring Apple plants to the U.S. He said Cook doesn’t have to go to ‘China, or Vietnam, or wherever he does now.’
Trump went on to say that Cook didn’t budge. He only mentioned that he ‘understood’ Trump’s wishes. But Trump is confident that Cook will re-evaluate his stance. This is because Trump is ready to offer ‘large tax cuts’, as well as reduced regulations.
But the biggest barrier for Cook might have nothing to do with the two listed above. In an interview, Cook mentioned America’s lack of skilled workers required for such large-scale production. He said that in China, you could fill ‘multiple football fields’ with skilled labor, as opposed to filling only a room with U.S. workers. This means that proficient labor in China is many orders of magnitude greater than America. And for Apple, being one of the largest producers of electronics worldwide, this wouldn’t cut it.
Even if Apple flips, it has to convince its partners. Both Foxconn and Pegatron seem unconvinced of the feasibility of this new prospect. Foxconn chief was reported as saying that costs would double in a single generation.
It all comes down to the determination of Trump. One of his rallying cries in the election was bringing jobs to the U.S. Especially those that have been outsourced by American tech companies. Apple is naturally a chief target; bringing it on board will convince others to follow suit. Trump has also talked to Bill Gates, which is another big name in tech. Though his involvement with Microsoft is minimal these days.
Let’s see where this story goes next.