Tim Cook: Apple Not a Target in US-China Trade War - Report

Apple Inc Chief Executive Officer Tim Cook told CBS News in an interview broadcast on Tuesday that China has not targeted the company as a result of the US-China trade dispute.

"Currently the Chinese have not targeted Apple at all. And I don't anticipate that happening, to be honest", Cook told CBS News, answering a question on whether Apple was hit amid the trade war with China.

Tim Cook also noted that the possible 25 percent tariff on the iPhone XS could hurt sales in the US, adding, however, that "the iPhone is assembled in China. The truth is, the iPhone is made everywhere. It's made everywhere. And so a tariff on the iPhone would hurt all of those countries, but the one that would be hurt the most is this one".

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Amid rising tensions between Beijing and Washington over Huawei products, which the United States says are a threat to its national security, some have been speculating on whether China would retaliate to US sanctions, by banning Apple imports, which according to the US Goldman Sachs investment bank would decrease Apple's profits by almost 30 per cent.

The chief executive of Chinese telecom giant Huawei, Ren Zhengfei, said he would be the first to protest if Beijing retaliated against US sanctions by banning Apple products from China.

"That will not happen, first of all. And second of all, if that happens, I'll be the first to protest", Zhengfei told US Bloomberg news outlet in an interview, stressing that he considered Apple to be "his teacher".

US President Donald Trump has issued an executive order adding Huawei and its 70 affiliates to a trade blacklist, thereby restricting its activity in the country. From now on, US companies need permission from the government to trade with Huawei. As a result, Google had to suspend business operations with Huawei, including the transfer of all hardware, software and technical services, except for those publicly available via open source licensing.

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Several countries have accused Huawei of being sponsored by the Chinese state and spying on its behalf through its devices. Last year, Australia, Japan, New Zealand and the United States banned the company from participating in government contracts due to security concerns. Huawei has vehemently denied the accusations.

Since last June, whenTrump announced 25 per cent tariffs on $50 billion worth of Chinese imports in a bid to balance the trade deficit, the sides have exchanged several rounds of duties. Last week, Washington raised tariffs on another $200 billion worth of Chinese goods to 25 per cent due to the impasse of trade talks. Beijing retaliated by announcing tariff hikes of up to 25 per cent on $60 billion worth of US imports starting in June.

In January, Cook said in a letter to investors that the economic slump in China and US trade tensions have resulted in a drop in iPhone sales and forced Apple to downgrade earnings estimates for the first quarter. Cook noted that China’s economy slowed in the second half of 2018 amid expectations that rising trade tensions with the United States will continue to impact sales.

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