US President Donald Trump is preparing to announce a new $100 billion investment by Apple in manufacturing in the US, another move by the tech giant as it seeks to localize assembly and avoid tariff pressure from the White House. Shares of the iPhone maker jumped nearly 6% on the news;

Details

Donald Trump will announce Apple's new investment commitment on August 6 - the company will invest another $100 billion in U.S. manufacturing, reports Bloomberg. The money will be used to move supply chains and produce key components domestically, a White House official who requested anonymity told the agency. The new commitments are another step by Apple to ramp up production in the U.S. amid the threat of tough new duties on iPhone imports, Bloomberg notes. The company has previously pledged to invest $500 billion over four years to localize production, including building an AI server factory in Houston and creating a supplier academy in Michigan;

"President Trump's 'America First' economic strategy has already attracted trillions of dollars in investment that supports U.S. jobs and businesses," said White House spokesperson Taylor Rogers. - The new agreement with Apple is another win for the manufacturing sector and a step toward strengthening the nation's economic and national security."

Following the announcement, Apple shares jumped nearly 6% to $214.7 in trading on Aug. 6 to $214.7. However, the iPhone maker's market value is still down 14.5% since the beginning of the year amid investor concerns over duties and the company's lagging AI efforts.

What does that mean

The promised investments may "mitigate the White House's irritation" over the fact that Apple assembles its iPhones for the U.S. market in India, according to analysts at Bloomberg Intelligence. In their opinion, in the U.S., the company will focus on the release of more expensive devices, development of artificial intelligence technologies and semiconductors, rather than on mass production of budget electronics.

Nancy Tengler, head of investment firm Laffer Tengler Investments, called Apple's announcement "a smart move in response to the president's demands to move iPhone production to the U.S.," Reuters reports. She said the stock's rise after the news is a kind of relief rally: "Tim Cook, who previously remained silent under the onslaught of [Trump's] criticism, is now extending [him] an olive branch."

However, Apple is still far from the full localization of production in the U.S. that Trump and his team would like to see, emphasizes Bloomberg. The complete transfer of iPhone assembly to the United States is a huge challenge for Apple: the company has hundreds of thousands of employees at plants in China and India, and production processes are heavily tied to these sites. That's why Apple CEO Tim Cook is betting on getting Apple new duty exemptions-just like in Trump's first term, when the company managed to avoid import duties on its products, Bloomberg writes.

Context

Earlier this year, Trump threatened to impose a 25 percent duty on Apple products if the company did not move iPhone assembly to the United States. Now the White House is considering imposing duties on all semiconductor products as early as next week. Apple estimates that the duties cost it $800 million in the second quarter, and could add another $1.1 billion in costs in the third quarter. In a recent conference call with analysts, Cook noted that "most iPhones sold in the U.S. are assembled in India," while the MacBook, iPad and Apple Watch are assembled in Vietnam. He also emphasized: "We are certainly committed to optimizing the supply chain and will expand manufacturing in the U.S.".

Apple is only part of Trump's ambitious strategy to turn the U.S. into the center of global tech manufacturing, Bloomberg points out. Since the beginning of the year, Trump has already announced a number of major investments: $100 billion in data centers for AI from Oracle, SoftBank and OpenAI (with the potential to increase to $500 billion); Nvidia plans to invest up to $500 billion in U.S. infrastructure for AI; the European Union has promised to buy U.S. energy for $750 billion and invest another $600 billion in the U.S. economy, and an agreement has been reached with Japan to create an investment fund for $550 billion, the agency summarized.

This article was AI-translated and verified by a human editor

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