Apple Only Makes 1 Product in America. Here’s Why It’s Really Good News That It Just Got a Major Tariff Exemption by Inc.com

“Apple Only Makes 1 Product in America. Here’s Why It’s Really Good News That It Just Got a Major Tariff Exemption” | Written By: Jason Aten / Inc.com

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Apple Only Makes 1 Product in America. Here’s Why It’s Really Good News That It Just Got a Major Tariff Exemption

The Department of Commerce approved a waiver for certain components that make up Apple’s Mac Pro, meaning it will continue to be built in Texas.

By Jason AtenWriter and business coach@jasonaten
Getty Images

Last week, Apple revealed that despite an earlier announcement it planned to move production of the Mac Pro to China due to tariffs that were set to take effect this fall, the company will instead keep making that product in Texas. The Mac Pro is Apple’s only American-made product, but that was set to change unless the company received a waiver from tariffs on necessary components. 

Previously, President Trump had indicated that that wasn’t going to happen, instead encouraging Apple to continue making the products in America. It’s not entirely clear that the President fully understands global manufacturing supply chains, but that’s not really the point. The point is that something clearly changed and Apple will continue making its professional-class desktop here.

There’s been much said about the Trump administration’s plans to impose large tariffs on almost everything imported from China over the next few months, but the fact that Apple has received federal product exclusions on these parts is a good sign. And it’s not just because the Mac Pro is the only American-made product that Apple sells. It’s true because tariffs in general are bad for American consumers, especially as we quickly approach the biggest shopping season of the year.

Granted, the main reason Apple can afford to assemble the Mac Pro here in the United States–which is began with the previous model–is because it happens to be the most expensive computer Apple sells, with a starting price of $6,000. Still, a 25 percent tariff on components adds up to real money, and Apple had previously indicated it would move production out of its Austin, Texas facility without an exemption.

In a statement, Apple’s CEO, Tim Cook said: ”The Mac Pro is Apple’s most powerful computer ever and we’re proud to be building it in Austin. We thank the administration for their support enabling this opportunity.” Cook has actively courted a relationship with this administration in the midst of a growing trade war, acutely aware of the effect it could have on Apple. 

Even if you aren’t a video editor or other creative that requires the high-powered Mac Pro, this is a big deal. Here’s why: 

Almost every other product apple sells, including iPhones, iPads, MacBooks, iMacs, and Apple Watches are scheduled to be slapped with tariffs on December 15 unless the federal government reverses its previous decision. That means that the prices of all of those devices is likely to increase just before the peak holiday shopping season.

Those tariffs have already been delayed once, but the fact that the government is quietly reviewing the real impact of these tariffs shows that it is beginning to understand that they represent a real cost to both companies and consumers. 

Some might be tempted to argue that Apple only makes the Mac Pro in America in the first place is as a public relations exercise. Apple, however, has made it clear that its commitment to American design and manufacturing is real, and results in over 450,000 US jobs just in suppliers alone.

Regardless of how you might feel about Apple, or its products, everyone benefits when major companies invest here in the United States. Despite what some people might say, tariffs have the exact opposite effect because they simply raise the cost of doing business, which raises prices for the rest of us.

And, while the administration has yet to postpone or cancel other planned tariffs, I count it as a win that cooler heads seem to have prevailed for now. Otherwise, the biggest casualty in a trade war isn’t China, and it isn’t tech companies–it’s your wallet.

Published on: Sep 30, 2019
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.
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“Apple Only Makes 1 Product in America. Here’s Why It’s Really Good News That It Just Got a Major Tariff Exemption” | Written By: Jason Aten / Inc.com
September 30, 2019 at 02:05PM
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