Donald Trump's Apple threat is ‘closer to home’, expert warns

By Eamon Quinn

President Donald Trump’s threats to expand tariffs to almost all the goods the US imports from China, entangling Apple and its iPhone supply chains, mean the potential fallout of a global trade war on Ireland is getting ever “closer to home”, an expert warned.

PwC Ireland head of tax Joe Tynan — a frequent visitor to China advising Irish-based companies and Chinese investors — said the latest salvo from the White House could spur further retaliation from China and eventually raise major “challenges for Ireland”.

On Saturday, President Trump renewed his campaign targeted at Apple CEO Tim Cook by tweeting that Apple should make products in the US to avoid tariffs on Chinese imports. “Start building new plants now,” he tweeted.

Apple prices may increase because of the massive Tariffs we may be imposing on China - but there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China. Start building new plants now. Exciting! #MAGA

— Donald J. Trump (@realDonaldTrump) September 8, 2018

The president told reporters he plans to impose a further $267bn (€231bn) in tariffs on Chinese imports. If carried through, almost all goods the US imports from China would be covered.

Apple, which has extensive component manufacturing supply chains across Asia, employs 6,000 people in Ireland, most of whom are based in Cork, managing its global operations outside of the Americas. It has 80,000 staff in the US and employs 123,000 people worldwide. Apple has warned new tariffs would lead to higher prices for a “wide range” of Apple products in the US.

Ireland has so far tapped benefits from increased investments by multinationals arising from the new global tax regime by the OECD, but second-wave effects of a global trade war would bring it all “to a shuddering halt”, Mr Tynan said. The threat for Ireland in any flare-up of the unresolved trade spat between the US and the EU also remained, he added.

Separately, UK consultancy, the Centre for Economics and Business Research (Cebr), said “a post-Brexit mini-recession is almost inevitable” in Britain.

UK firms are stock building to offset the effects of a no-deal Brexit on everything from medicines to sandwich ingredients. That will boost UK growth this year said Cebr, only for it to fall back next year. Its former economist Angus McCrone believes UK firms will “gradually” run down stocks after Brexit, and dampen growth, Cebr said.