One day after his unexpected attendance at a White House state dinner for French president Emmanuel Macron, Apple CEO Tim Cook will meet directly with U.S. president Donald Trump in what is now being described as an effort to prevent a trade war with China. According to Fortune, the meeting will take place this afternoon and will be closed to the press.
Over the past month, the Trump administration has taken punitive actions against foreign trade partners — particularly China — in an effort to rebalance “bad deals” and inequities in trade relationships. Aluminum tariffs were initially eyed as a potential concern for Apple, which uses the metal in most of its products, though analysts concluded that the impact on Apple would likely be limited. Still, the threat of broader consequences to Apple’s production chain has hung over the company.
Cook has described Apple’s engagement with both the Chinese and U.S. governments as practical — an effort to keep talking to promote change, rather than sitting on the sidelines. Beyond selling products in China’s growing marketplace, the company relies almost exclusively upon Chinese laborers to assemble its hardware and accessories and thus has continued to work with Chinese authorities despite requests for app censorship and access to private Chinese user data. Similarly, Apple’s bottom line has benefitted from massive tax breaks and business incentives that Trump signed into law, even though Cook has publicly taken issue with the U.S. president’s immigration and social policies.
The risk to Apple if trade relations continue to sour could be as specific as targeting the company’s Chinese production or materials or as general as broadly damaging its relationship with China’s government. Given Apple’s size and dealings with both countries, Fortune notes that a U.S. trade war with China “could place Apple in the Chinese government’s cross-hairs. A Communist Party newspaper last month listed the iPhone maker among the American companies that would be ‘most damaged’ if a trade war erupted.” Given Chinese government control of Community Party publications, Apple’s inclusion on the list could be viewed as a direct threat from the Chinese government, not just media speculation.
However, Cook has aggressively worked to insulate Apple from regulatory uncertainty by cultivating his personal relationships with Chinese leaders. Last month, he was the leading U.S. representative at an annual government business summit in Beijing, where he encouraged both countries to resolve their trade differences. He has visited China multiple times since becoming Apple’s CEO and has repeatedly described the country as increasingly important to the company’s fortunes.