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Apple Reports Declining Profits and Slowing Growth, Again

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The Chinese market has emerged as one of Apple’s greatest vulnerabilities. The region is the company’s No. 3 market for sales. This month, Chinese officials disclosed that the country’s growth had fallen to its slowest pace in three decades. Apple also assembles most of its products in China. The company’s supply chain has long drawn the ire of President Trump, who has tried to publicly pressure Apple to build more of its products in the United States.

The company has moved the other way instead, shifting assembly of its new top-of-the-line Mac Pro desktop computers to China from Texas. Apple’s attempt at making the Mac Pro in Texas turned out to be a headache, as production problems and a lack of manufacturing infrastructure in the area delayed the computer’s introduction.

Mr. Trump has placed tariffs on $250 billion worth of Chinese goods, including semiconductors, televisions and ball bearings, as part of a bruising trade war. So far, Apple products have largely escaped the tariffs’ effect.

Last week, Apple filed 15 requests with the United States trade representative’s office asking that certain products it imports from China be excluded from the tariffs, including components used in the Mac Pro desktop like power cables and circuit boards. Apple said in the requests that it cannot find the products outside of China.

On Friday, Mr. Trump wrote on Twitter that Apple “will not be given Tariff waiver, or relief, for Mac Pro parts that are made in China” and that the company should “Make them in the USA, no Tariffs!”

Apple did not comment on Mr. Trump’s tweet. In the past, the company has called itself “an engine of economic growth in the United States.” It said that last year it spent $60 billion with 9,000 American suppliers, helping support 450,000 jobs.

Mr. Cook has encouraged officials in the United States and China to resolve the trade dispute, but the tensions have recently accelerated. And while the countries resumed trade talks this week, hopes for a transformative deal are dwindling.



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