The strange rapprochement between Trump and Apple has an explanation: Samsung

Apple and Trump maintain a striking diplomatic dance, very different from that of the president’s arrival to power in 2016, when the distances were much greater. It is not the only case of Silicon Valley. The link that unites them is simpler than it seems: neither of them is interested in Samsung winning.

Why is it important. As Trump promised aggressive tariffs against China, Apple shares have reached its all-time highs. It seems contradictory, but it is not: it is a sign that Wall Street understands what is happening behind the scenes.

Between the lines. Tim Cook has had dinner with Trump again. It is the same strategy that in 2019. And it worked then. On that occasion, Cook used a “very convincing” argument, in Trump’s own words: tariffs would harm Apple compared to Samsung, which manufactures mainly in South Korea.

• The argument weighed too heavily on Trump then and most likely will now as well.
• It is a matter of national pride, although it is a matter of trade policy.
• Cook has proven to be a master in the art of corporate diplomacy.

In summary. We are facing a case study on how economic nationalism finds its limit in the global competitive reality. Even the toughest positions have to adapt to the market.

While Trump certainly wants Apple to move more production out of China, he can continue his anti-China rhetoric while protecting Apple. And Apple can maintain its production in Asia without sacrificing margins. It is a tacit agreement that benefits both parties:

• Trump achieves a symbolic victory by protecting an American company.
• And Apple saves itself a headache in its supply chain.

As predicted Deepwater Asset Managementan investment analysis firm, this move also seeks to protect other American companies from Chinese competitors. For example, BYD’s Tesla.

And now what. According to the aforementioned analysts, the big loser in this equation could be Samsung, which will see how its great rival keeps its competitive advantages intact while avoiding the new US trade policy.

Trump will end up helping Apple’s Chinese production continue. It’s the kind of unexpected turn that only business pragmatism can generate.

Featured image | Xataka with Midjourney

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