Tim Cook fears Apple will not fight with Samsung if it is imposed a 10% tax rate.

When talking about dinner with Mr. Tim Cook last Friday, US President Donald Trump said that Apple CEO voiced concern that their big rival, Samsung Electronics, would have an advantage right in the US because no Like Apple, their products are not subject to new tariffs when imported into the United States.

Mr. Cook and Mr. Trump’s dinner took place while the US president was staying at his Golf Club in Bedminster, New Jersey. Before preparing to return to Washington, Mr. Trump had a talk with reporters about what they had exchanged for dinner.

Most Apple products will be subject to a 10% tariff to be applied in early September – meaning in the next few weeks. While products like the iPhone, iPad and MacBook may be delayed until December 15, other products such as Apple Watch, AirPods and many other accessories still face this tariff.

Mr. Trump said that Mr. Cook had a “convincing argument” about the difficulty Apple would face when competing with Samsung if their products were subject to new tariffs: ” I think he made a decision. The essay is very convincing . ”

” It is very difficult for Apple to pay taxes if they are competing with a very talented company but not subject to that tax .” Mr. Trump added.

The “very talented” company that Mr. Trump mentioned is Samsung. Perhaps this is one of the few times the head of Apple must publicly acknowledge his worries when competing with a formidable opponent like Samsung, especially in the context of the US-China trade war.

While most Apple products are assembled in China before being imported into the United States and shipped to other countries around the world, Samsung produces its products in many different countries, including South Korea and Vietnam, along with China. So the import tax rate on the US is much less than that of Apple.

Apple needs to find a way to bring this tariff into its product costs, while Samsung does not need to do so, putting Apple at a competitive disadvantage. Samsung has launched its latest flagship, Galaxy Note 10 in August, while Apple plans to upgrade their iPhone, Apple Watch and computers later this year.

Refer to Bloomberg