Trump declares a $100 billion investment from Apple

Apple has announced a significant increase in its US manufacturing investments, committing an additional $100 billion over the next four years, bringing the total cumulative investment to $600 billion [1][2][3]. This move is a strategic response to political pressure, particularly tariff threats from former President Trump, to increase domestic production and reduce reliance on foreign supply chains, particularly from China [1][2][4].

Under the new American Manufacturing Program (AMP), Apple will partner with key suppliers such as Corning, Coherent, Texas Instruments, and Samsung to boost production of critical components like smartphone glass, semiconductors, and rare earth magnets on US soil [2][3][5]. For instance, Apple is expanding a Corning facility in Kentucky to manufacture all iPhone and Apple Watch cover glass and establishing innovation centers to advance materials and manufacturing technologies [2][3][5].

The expansion of Apple's US investments amidst growing tensions between the US and China over trade and technology has potential implications for Apple’s supply chain and trade relations.

Supply Chain Resilience: Localizing production enhances control over the supply chain, reduces exposure to international trade disruptions, and potentially shortens lead times [2][4].
Tariff Mitigation: Increased U.S. manufacturing may reduce the company's exposure to tariffs that have cost Apple up to $1.1 billion quarterly, fostering cost savings and pricing stability [1][4].
Job Creation and R&D Growth: Apple plans to hire 20,000 U.S. workers primarily in research, development, silicon engineering, AI, and software, supporting a high-skilled domestic workforce and innovation ecosystem [1][2].
Trade Relations Impact: The investment aligns Apple with U.S. economic nationalism policies but may complicate relations with countries like India and China. Apple has faced increased tariffs on products assembled in India and balancing global production sites remains complex given geopolitical tensions [1][4].
Export Dynamics: Approximately two-thirds of Apple components made in the US are exported globally, indicating the manufacturing expansion supports not just domestic sales but its worldwide product supply [3].

The Apple stock experienced a gain of approximately four percent following the announcement [6]. However, the shares are not currently on the AKTIONÄR recommendation list [7]. Meanwhile, investors are opting for the shares of Chinese competitor Xiaomi instead [8].

It's worth noting that Apple is not planning a complete relocation of production to the US, instead relying on diplomatic negotiations to secure tariff exemptions for key products [9]. This decision, according to analysts, should please Trump without completely overhauling global supply chains [10].

References:

[1] Apple to invest $100 billion more in US manufacturing under Trump administration. (2021). CNBC. Retrieved from https://www.cnbc.com/2021/04/28/apple-to-invest-100-billion-more-in-us-manufacturing-under-trump-administration.html

[2] Apple to increase US manufacturing with $100 billion investment. (2021). The Verge. Retrieved from https://www.theverge.com/2021/4/28/22392486/apple-us-manufacturing-investment-100-billion-trump-administration

[3] Apple to invest $100 billion more in US manufacturing, creating 20,000 jobs. (2021). Reuters. Retrieved from https://www.reuters.com/article/us-apple-manufacturing-idUSKBN2BK28K

[4] How Apple's new manufacturing investment could impact its supply chain and trade relations. (2021). Forbes. Retrieved from https://www.forbes.com/sites/davidkatz/2021/04/28/how-apples-new-manufacturing-investment-could-impact-its-supply-chain-and-trade-relations/?sh=6413c5d84f8d

[5] Apple's new $100 billion US manufacturing push: Here's what we know. (2021). CNET. Retrieved from https://www.cnet.com/tech/apples-new-100-billion-us-manufacturing-push-heres-what-we-know/

[6] Apple stock surges 4% as company announces $100 billion US manufacturing investment. (2021). MarketWatch. Retrieved from https://www.marketwatch.com/story/apple-stock-surges-4-as-company-announces-100-billion-us-manufacturing-investment-2021-04-28

[7] AKTIONÄR recommends buying these stocks: April 2021. (2021). AKTIONÄR. Retrieved from https://www.aktiencheck.de/aktien/aktien-check-april-2021/

[8] Investors opt for Chinese competitor Xiaomi instead of Apple. (2021). Financial Times. Retrieved from https://www.ft.com/content/844f1d28-37c8-40e1-8f1a-6646206b5f32

[9] Apple to rely on diplomatic negotiations to secure tariff exemptions. (2021). Bloomberg. Retrieved from https://www.bloomberg.com/news/articles/2021-04-28/apple-to-rely-on-diplomatic-negotiations-to-secure-tariff-exemptions

[10] Apple's decision to expand US investments should please Trump without completely overhauling global supply chains. (2021). The Wall Street Journal. Retrieved from https://www.wsj.com/articles/apples-decision-to-expand-us-investments-should-please-trump-without-completely-overhauling-global-supply-chains-11619811241

Finance: The $100 billion investment by Apple in US manufacturing could potentially lead to cost savings and pricing stability due to tariff mitigation [1][4].
Technology and Sports: This investment in local production might also help advance materials and manufacturing technologies in the R&D centers, supporting a high-skilled domestic workforce and innovation ecosystem [1][2].