Apple, Under Threat from Trump Tariffs, Will Add 20,000 US Jobs

(Bloomberg) — Apple Inc., as it seeks relief from US President Donald Trump’s tariffs on goods imported from China, said that it will hire 20,000 new workers and produce AI servers in the US.

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The company said Monday that it plans to spend $500 billion domestically 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. The disclosure comes days after Trump and Apple Chief Executive Officer Tim Cook met in the Oval Office.

“He’s investing hundreds of billions of dollars,” Trump said after the meeting last week. He implied that the iPhone maker is investing locally because it does not want to pay tariffs. Trump has threatened an additional 10% tax on items imported from China, where Apple builds the vast majority of iPhones and other products. But he has traded investment in the US for relief in the past.

The $500 billion investment and 20,000 new jobs over the next four years mark Apple’s biggest US commitment to date. Apple said it hired 20,000 research and development workers over the last five years and said in 2021 it would invest $430 billion locally over the next half-decade.

Apple’s shares slid as much as 1.5% in pre-market US trading.

“We are bullish on the future of American innovation, and we’re proud to build on our long-standing US investments with this $500 billion commitment to our country’s future,” Cook said in a statement. “We’ll keep working with people and companies across this country to help write an extraordinary new chapter in the history of American innovation.”

During his first administration, Cook was able to successfully sway Trump into sparing the iPhone from tariffs by arguing that the tax would serve to benefit competitors like South Korea-based Samsung Electronics Co. Apple also made multiple announcements during Trump’s first term about US investments and credited Trump with Mac Pro manufacturing in Texas despite its manufacturing computers there since 2013.

In exchange, Apple was able to retain its high profit margins and avoid significantly raising product prices during Trump’s first presidency. With Trump again in office with a similar plan to push US companies to build goods in the US to avoid taxes on foreign imports, Apple is taking a similar tact with a strategic investment announcement that will meet Trump’s desires.

In January, Cook was one of several US technology company CEOs to attend Trump’s inauguration in Washington. He also met with Trump at the president’s Mar-a-Lago Club in Palm Beach, Florida, after his election victory in November. Apple didn’t say whether the new investments were already underway before Trump’s win.

Apple said that it, together with Foxconn Technology Group, will later this year begin producing the servers that power the cloud component of Apple Intelligence — a system called Private Cloud Compute — in Houston. That marks a relocation, at least for some production, from overseas. Next year, it says a 250,000-square-foot facility for such manufacturing will open in the city.

The Private Cloud Compute servers use advanced M-series chips already found in the company’s Mac computers. Those chips themselves, however, continue to be produced in Taiwan.

Apple will also expand data center capacity in Arizona, Oregon, Iowa, Nevada and North Carolina, all states with existing Apple capacity. The company confirmed that mass production of chips started at a Taiwan Semiconductor Manufacturing Co. facility in Arizona last month. Bloomberg News recently reported that plant is building chips for some Apple Watches and iPads.

The 20,000 additional jobs, Apple said, will focus on research and development, silicon engineering and AI. The company is opening up what it calls a manufacturing academy in Detroit, where it will help smaller companies with manufacturing. It already operates an academy for app developers in the city. It’s also doubling its manufacturing fund in the US to $10 billion.

(Updates with Apple share decline in the fifth paragraph.)