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Trump mulls tariff’s effect on Apple and Samsung war

Aug 20,2019
U.S. President Donald Trump said Sunday that Apple CEO Tim Cook had “made a very compelling argument” about how U.S. tariffs on Chinese goods would hurt the company ? and help competitor Samsung Electronics.

Trump’s comments didn’t go beyond that notion. But two sentences were enough to make headlines Monday in Korean media outlets and transform the tariff issue into an Apple-versus-Samsung story.

“He made a good case that Samsung is their number one competitor and Samsung is not paying tariffs because they’re based in South Korea, and it’s tough for Apple to pay tariffs if they’re competing with a very good company,” Trump told reporters at an airport in New Jersey. “I thought he made a very compelling argument, so I’m thinking about it.”

The two main rivals in the high-end smartphone business are both struggling in terms of sales. In terms of pushing tech boundaries, Apple has been a laggard this year. Samsung released its first 5G phone and is preparing to launch a foldable device, while Apple’s first 5G phone isn’t expected earlier than 2020.

Adding to Apple’s worries, the United States is set to levy a 10 percent tariff on imported Chinese goods including laptops and mobile phones from Dec. 15 as part of its ongoing trade row with China.

While most of Apple’s smartphone manufacturing lines are in China, Samsung’s production is largely based in Vietnam and India. Samsung also has facilities in Korea, as Trump said, but the production volume is small. It once had two smartphone factories in China but production has been wound down since last year. The company is reportedly planning to shut down its last phone production plant in China next month.

Trump’s comments represent a softer response to Apple compared to his previous Twitter posts that said if the tech company was worried about tariffs on Chinese imports, it should move production to the United States.

The biggest question about the U.S. president’s concern for Apple is whether he’s willing to offer support that would raise the stakes for its main competitor, Samsung.

The Korean tech company did not comment, but analysts said that scenario was unlikely.

“Discussing the possibilities of antidumping or safeguard measures from [Trump’s] Sunday comments would be going too far,” said Cho Gyeong-lyeob, head researcher at the Korea Economic Research Institute. “Imposing tariffs on non-Chinese products can spark trade disputes with other countries but offering benefits exclusively to Apple among other U.S. companies in China doesn’t make sense either,” said Cho. “I think this will stop at Trump having shown that he is paying attention to U.S. companies’ worries.”

Analyst Greg Roh of Hyundai Motor Securities was sure that Trump won’t target Samsung.

“Samsung was just part of Tim Cook’s complaint - this is about Apple in China, not about Samsung,” he said. “If there is a move, Trump might delay the implementation of the tariffs or agree to wait until Apple finds a way to reduce its production in China.”

BY SONG KYOUNG-SON AND CHAE YUN-HWAN [song.kyoungson@joongang.co.kr]


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