When President Trump says the US is going to place a 35% tariff on imports from China and Mexico, he may have been thinking about the automobile industry but he has not thought about Silicon Valley’s products. One glaring example is Apple and in a recent article by Eric Reguly titled Apple deserves to feel Trump’s pressure on jobs.

Apple by market capitalization is one of the most successful companies in the world, its shares at $120 are worth $630 billion. It has helped define the Silicon Valley and is building a new round office building in Cupertino, California which is termed the spaceship and will house 13,000 employees. From the perspective of highly educated and paid workers, it is good thing.

Apple builds almost none of its hardware in the US, most of it is done in China. If President Trump is talking manufacturing jobs, he can look at his iPad. Apple is better at design, packing and marketing than coming up with breakthrough innovations.

What powers the iPhone, iPad, and iPod? Lithium-ion batteries developed by the Department of Energy. The liquid crystal displays came from the National Institutes of Health, the National Science Foundation, and the Department of Defence. Apple devices are connected to the internet which is not an Apple invention.

Nor is the micro hard drive, the microprocessor, GPS, Siri or DRAM cache which emerged from the US Defence Advanced Research Projects Agency and other government departments.

Apple benefits from government research, benefits from Research and Development tax breaks, and benefits from government subsidized university graduates. In 1960 a law was passed that allows companies to avoid paying a 35% federal tax on profits made outside the US until those profits came back into the US. Apple has $216 billion in overseas accounts. President Trump is considering lowering the tax which will benefit Apple.

One can look at the good Apple has done and continues to do for millions of people have a device that works almost flawless and gives them a communications and entertainment device. Shrinking the size of the laptop to a phone size was genius.

Linking to dividend paying stocks, when the government offers rhetoric it offers a broad brush which many companies get painted by. Apple is a successful company with a well paid and growing workforce in the US, but it does no manufacturing; it does take government research into the private sector to make money (should it pay a royalty to the agencies?), it does not do manufacturing in the US – will prices go up 35%? and it does have billions in offshore accounts paying little or no tax on. Similar to most things in life, what seems simple is often complex.

There are more questions than answers, till the next time – to raising questions.