Apple Inc committed to spending another $100 billion on domestic manufacturing ahead of an event with President Donald Trump, marking the latest pledge by the tech giant to increase US production as it seeks to avoid punishing tariffs on its flagship iPhones.
As part of what it calls the American Manufacturing Program, or AMP, Apple promised to bring more of its supply chain and advanced production to the US. The company’s AMP partners include glassmaker Corning Inc, Applied Materials Inc, Texas Instruments Inc and others, the company said.
Corning will dedicate an entire factory in Kentucky to Apple glass production, increasing that company’s workforce in the state by 50 percent, the iPhone maker said. Corning was already a supplier to Apple, making glass for the very first iPhone at the same factory.
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The move is part of a push toward assembling additional critical components domestically, according to a White House official who detailed the announcement on the condition of anonymity. Apple Chief Executive Officer Tim Cook is expected to attend the White House event.
“President Trump’s America First economic agenda has secured trillions of dollars in investments that support American jobs and bolster American businesses,” White House spokesperson Taylor Rogers said in a statement.
“Today’s announcement with Apple is another win for our manufacturing industry that will simultaneously help reshore the production of critical components to protect America’s economic and national security.”
The company had previously announced plans to spend $500 billion in the US over the next four years, which will include work on a new server manufacturing facility in Houston, a supplier academy in Michigan and additional spending with its existing suppliers in the country. Wednesday’s announcement will bring Apple’s cumulative commitment to $600 billion.
READ MORE: Apple plans $500b in US investment, 20,000 research jobs in next four years
Apple shares were up 5.1 percent on Wednesday, the most in almost three months.
The latest pledge may “soften the White House’s ire” over Apple’s heavy reliance on India for iPhone assembly, Bloomberg Intelligence analysts Anurag Rana and Andrew Girard said. “We anticipate Apple will focus on higher-end products, artificial intelligence labs and semiconductor engineering in the US, rather than mass-produced lower-end phones and accessories.”
While Apple’s promised investment is substantial, it stops short of the full shift to US-based production that Trump and top White House officials have envisioned.
Earlier this year, the president threatened to hit Apple with a tariff of at least 25 percent if it didn’t move manufacturing of the iPhone to the US, a day after meeting with Cook at the White House. Trump administration officials have suggested that Apple could assemble its phones and other electronics domestically using robotics.
Apple Inc said last week that it took an $800 million hit from tariffs in the June quarter — slightly less than previously projected — and expected them to add $1.1 billion its costs in the September quarter, assuming no policy changes or new duties.
During a call last week with analysts, Cook said “the vast majority” of iPhones sold in the US come from India, while the bulk of other products, such as MacBooks, iPads and Apple Watches, sold in the US are manufactured in Vietnam.
“We obviously try to optimize our supply chain,” Cook said at the time. “And ultimately, we will do more in the United States.”
But onshoring manufacturing, particularly for the iPhone product line, would amount to a massive undertaking for Apple, whose facilities in China and India employ several hundred thousand people and involve heavily customized processes.
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Instead, Cook has led a push to win a tariff carve-out for the company’s most important products. Trump is readying plans to unveil levies on all products containing semiconductor chips as soon as next week. Separately, the president’s country-specific tariffs on dozens of trading partners are set to take effect on Thursday.
During Trump’s first term, Apple was able to convince Trump to exempt its products from import taxes. If Cook is able to do so again, it could help the company avoid costs that analysts expected to erode profit margins and increase consumer prices — or even offer a competitive advantage over foreign rivals including Samsung Electronics Co.
Cook has sought to curry favor with Trump over a series of private meetings and dinners, and was among a small group of tech leaders — including Elon Musk, Alphabet Inc’s Sundar Pichai, Meta Platforms Inc’s Mark Zuckerberg and Amazon.com Inc founder Jeff Bezos — who attended the president’s second inauguration at the US Capitol.
Still, Apple’s initial $500 billion, 20,000-job pledge, first announced in February, represented just a slight acceleration over its prior investments and previously announced plans, adding $39 billion in spending and an additional 1,000 jobs annually.
The Apple event is the latest in a flurry of announcements Trump has made alongside corporate leaders who have said they plan to increase their US presence.
Earlier this year, Trump announced a $100 billion investment in artificial intelligence data centers from Oracle Corp, SoftBank Group Corp and OpenAI Inc — with a goal of increasing the total to at least $500 billion — a bid to boost American innovation in technology and artificial technology. OpenAI and Oracle later announced they will develop 4.5 gigawatts of additional US data-center capacity in an expanded partnership.
READ MORE: Apple broadening ties with Chinese suppliers to drive innovative solutions
The president has also ramped up partnerships with key players in the chip industry, announcing that Nvidia Corp, the dominant player in chips for AI models, plans to produce as much as half a trillion dollars’ worth of AI infrastructure in the US over the next four years through manufacturing partnerships.
Trump has also made securing investments a key part of negotiating with other countries on geopolitical issues, such as trade.
Part of the US’ deal with the European Union included an agreement from the EU to purchase $750 billion in American energy products and invest $600 billion in the US, while the president’s deal with Japan includes the creation of a $550 billion fund to make investments in the US.