Apple was not on Donald Trump’s favorite list when he was campaigning to be President. However, as President of the United States, his reaction to the world’s biggest company will be worth watching. It can be both good and bad for the iPhone maker.Donald Trump by Gage Skidmore
Will Trump be good for Apple?
While campaigning, Trump said that he will call for a boycott of Apple products if the company does not relax its pro-encryption norms. Moreover, he is disappointed with the company as it does not manufacture the majority of its products in the U.S.
On Wednesday, Stratechery’s Ben Thompson wrote that Trump had attacked companies directly, specifically, Apple and Amazon (its owner Jeff Bezos owns The Washington Post), but “his trade rhetoric taken to its logical conclusion will hurt Silicon Valley more than almost anyone else.”
Since the financial crisis, Warren Buffett's Berkshire Hathaway has had significant exposure to financial stocks in its portfolio. Q1 2021 hedge fund letters, conferences and more At the end of March this year, Bank of America accounted for nearly 15% of the conglomerate's vast equity portfolio. Until very recently, Wells Fargo was also a prominent Read More
Apple might benefit from the Trump presidency as it will finally be able to use its overseas cash for purposes like R&D and share buybacks rather than issuing more debt. Throughout his campaign, Trump talked about companies that manufacture their products in China, specifically, companies making computers and smartphones.
Trump wants these companies to bring their business back to the United States. Apple is one such company that hoards a large amount of cash overseas to avoid repatriation taxes. Trump has proposed a onetime tax holiday with a smaller 10% penalty for companies repatriating overseas cash.
Apple has maintained distance from Trump
Apple stayed away from Trump and did not follow its long-time tradition of providing support to this year’s Republican National Convention, notes Recode. In March, Cook said in Time magazine that he and Trump did not have any direct conversations on the issues.
“The way I look at it is, Apple is this great American company that could have only happened here,” he said, speaking about the encryption matter.
Cook said at that time that Apple is not the decision maker on this or any other policy matters, but it is time that one should stand up to the government. He said there had been various instances in history when the government overreached and people have stood up in their own ways telling the government to stop.
“We see that this is our moment to stand up and say ‘Stop,’” Cook said.
Apple is a company that depends highly on the economy’s health, as people must have disposable income to spend on its products. Therefore, it is to be seen what President Trump will do to revive the economy.