Armed with a circular plaque in a 24-karat gold base which Tim Cook said was made in Utah, the Apple CEO carefully opened an Apple box (which he said was made in California) and gave the custom-made gift to Donald Trump when he visited the White House on Wednesday (August 6), the same day the U.S. president slapped a mind-boggling 39% tariff on Switzerland.
Trump’s fetish for gold is public knowledge. When he met Stormy Daniels in 2006 at a golf tournament in Lake Tahoe, the porn star said he saw a set of golden tweezers in his hotel suite. Trump’s private plane – Boeing 757 – was fitted with gold-leafed seatbelts and faucets. He used the golden escalator in Trump Tower when he announced his presidential candidacy in 2015.
During his campaign for a second term, Donald Trump sold gold sneakers for US$399 and a limited edition gold watch for US$100,000. And amid widespread immigration crackdowns and the return of a controversial travel ban, the U.S. president announced a “gold card” visa that offers applicants residency and a path to U.S. citizenship for US$5 million.
As one of several tech leaders who attended Trump’s inauguration earlier this year, Tim Cook certainly knows how to appease the narcissist president. In February, Apple announced it would spend a jaw-dropping US$500 billion in U.S. investments over four years, enough to convince the president to exempt iPhone from a “Tariff War” declared on the world two months later in April.
On the same day Cook gifted Trump the gold-based plaque made of glass manufactured in Corning’s Harrodsburg, Kentucky, the Apple boss was basically doing what he did previously to appease the Commander-in-Chief – without making the ultimate concession that Apple will make iPhones in the U.S. This time, Mr Cook announced plans to spend about US$600 billion over four years in the U.S.
Apple didn’t announce the “Made-in-USA” iPhone that Trump wants, but the POTUS appeared happy, even though the spending figure was already mentioned back in February. The additional US$100 billion investment in the U.S. was instantly covered back when Apple stock price surged over 5% – equivalent to a market capitalization increase of over US$100 billion.
Hilariously, Tim Cook hadn’t introduced anything new, but spewing marketing gimmick as if Apple is splashing new money. In fact, there wasn’t any significant investments even when the company announced US$500 billion investments in February this year. For example, some of Apple’s most valuable parts, such as its glass and facial recognition sensor, are made by U.S. companies that Apple has worked with for years.
The centerpiece of Apple’s announcement was the so-called American Manufacturing Program, which Apple said was designed to incentivize other companies to make parts for computers in the U.S. By Apple committing to purchase parts and expand its relationship with U.S. suppliers, it could give those companies the skills and capacity to expand their business. And it lets Apple take some credit for supporting the 450,000 total jobs at its suppliers.
However, a closer look at the members of the program shows that Apple has been working with many of its long-term partners for years. While it said that its U.S. suppliers are on track to make 19 billion chips for its products this year, that level of business doesn’t appear overnight. It was like Delta Airlines saying it is committing to purchase Boeing planes, which in turn will support American jobs.
For example, Apple said that all of its cover glass for iPhones and Apple Watches would be made by Corning, in Kentucky, and that it would spend US$2.5 billion on that effort. It’s a powerful symbol – while the phone might be screwed together in China or India, the surface that users touch around the world will be made in the U.S. But Apple has already promoted Corning as a critical American supplier in the past.
Trump might not realize it, but Corning’s glass has been used on the iPhone since its first version in 2007. While Apple typically doesn’t let its suppliers talk about their relationships, former COO Jeff Williams hailed Corning’s glass in 2017, when it got an “investment” from the Apple Advanced Manufacturing Fund. Apple followed that up with a US$250 million commitment commitment in 2019, and US$45 million in 2021.
Analysts are not dumb though. They are skeptical that the partnership could substantially improve Corning’s revenue. Morgan Stanley analysts exposed on Thursday (one day after Trump celebrated Apple’s dubious commitments) that Corning “already produces 100% of the cover glass for Apple’s phones and tablets,” adding that Corning’s glass business called Specialty Materials is worth about US$2 billion per year.
Apple also highlighted its partnership with Coherent, a longtime supplier of lasers for Apple’s facial recognition hardware, which is made in Texas. Morgan Stanley said the business at about US$100 million per year, and said Apple has options including Lumentum and Sony. Lumentum and Sony are key suppliers of the 3D sensing technology used in Android phones for facial recognition.
It was also misleading to say Apple is expanding a partnership with Texas Instruments to make chips in Texas and Utah. Texas Instruments has long supplied chips for the iPhone, such as circuits to control USB interfaces or power displays. Apple said it would partner with Samsung, another key supplier of parts like iPhone displays, to launch an “innovative new technology for making chips,” without offering additional details.
Cook’s other gimmick – declaration to partner directly with companies in the semiconductor chain, despite the fact that they actually sell services or goods to Apple suppliers. Other partnerships are with tooling company Applied Materials, chip foundry GlobalFoundries, and GlobalWafers America, which is supplying TSMC (Taiwan Semiconductor Manufacturing Co.) and Texas Instruments with made-in-USA wafers.
While GlobalFoundries manufactures chips for Broadcom, which supplies wireless chips for iPhones, Apple’s decision to buy millions of advanced chips made by TSMC in Arizona was actually made during Biden administration in 2022. Apple also repeated its past spending commitments in expanding data centres for AI (artificial intelligence) in North Carolina, Iowa, Nevada and Oregan.
Apple has little to worry about when it comes to who will hold the company accountable for its empty promises. The company doesn’t break down U.S. spending, and most of Apple’s suppliers are contractually required to keep the information secret. To make it even more fun,Apple doesn’t report how much its new campuses in Austin, Texas, or North Carolina end up costing.
Additionally, the US$600 billion headline number most likely includes lots of regular expenses, which Tim Cook conveniently used to trick the clueless Donald Trump. When Apple announced its US$500 billion commitment, it actually included payments to U.S. suppliers, direct employment, data centres for Apple Intelligence and corporate facilities, as well as spending on Apple TV+ productions in 20 states.
Apple started publicly announcing U.S. spending during Trump’s first administration in 2018, at a rate of about US$70 billion per year. In February, the company committed to US$125 billion per year. Wednesday’s announcement brings that figure to US$150 billion annually. That’s still a fraction of Apple’s total spending. In Apple’s fiscal 2024, the company’s global spendingwas US$275 billion alone. Yes, Cook was using the cost of doing business to scam Trump.
“The final assembly that you focus on, that will be elsewhere for a while,” – Cook admitted on Wednesday in the Oval Office. Trump said – “He makes many of the components here, and we’ve been talking about it. The whole thing is set up in other places, and it’s been there for a long time in terms of cost and all, but I think we may incentivize him enough that one day he’ll be bringing that back.”
Regardless of whether Trump suspected he had been scammed or not, the reality is India and China are Apple’s only two options for producing U.S.-bound iPhones at scale. And since iPhone models available in the United States don’t precisely match those sold elsewhere, Apple can’t just redirect iPhones intended for different markets just because Trump doesn’t like Beijing or New Delhi.
New iPhones sold in America, for example, don’t have physical SIM card slots anymore, and they support millimeter wave 5G, the kind of connection that provides faster, low-latency speeds but usually only at a short distance. So, what Apple can produce in the U.S., which it is already producing, is common content like the glass and Face ID module.
Cook’s announcement was designed to get Apple out of Trump’s crosshairs with respect to the ongoing tariff war. When Trump announced during a press conference on the same Wednesday that his administration planned to impose a 100% tariff on chips and semiconductors that would double their price, Apple – which relies on hundreds of different chips for its devices – would be exempt.
“CEOs are realizing that they do have to do something, and what they’ve discovered is that if they give the president something to brag about without destroying their company, that the problem might go away for a certain amount of time,” – said Peter Cohan, professor of strategy and entrepreneurship at Babson College who has written case studies on Apple.
“What Tim Cook demonstrated in the first administration was a real savvy navigation of the treacherous waters. I thought this announcement was super-important symbolically, because the president is looking for headlines,” – said Nancy Tengler, CEO of Laffer Tengler Investments, which holds a position in Apple. Like a broken record, Tim Cook just needs to repeat old investment news, and voila, Trump will foolishly swallow the hook, line and sinker.
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August 9th, 2025 by financetwitter
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