Trump intends to levy tariffs on two domestic businesses.
Unpped, Unbuckled, Unleashed: Trump's Tariffs Threaten Tech Giants and Toymakers Alike
Ready for a shake-up? President Donald Trump, known for his love of tariffs, is looking to target not one, but two high-profile American companies – Apple and Mattel – with tax hikes on their key products, all because of comments from their CEOs.
Now, carrying a bucketful of legal troubles, Trump's tactics could face some serious speed bumps, after a decision on Wednesday by the US Court of International Trade poked holes in the president's authority to impose tariffs single-handedly, a ruling temporarily halted by a Court of Appeals decision on Thursday.
However, Trump isn't a man to be stopped by a little legal red tape. With a bag full of tricks, it's clear he sees the specter of tariffs as a way to bend companies to his will.
Remember the good ol' days when Trump was cozy with Apple CEO Tim Cook, praising him after the company announced plans for 500 billion dollars in US investments? But Cook's announcement that he would shift production of iPhones destined for the American market from China to India didn't sit well with Our Man, who's promised (without much proof) that his tariffs would bring production back to US soil from foreign factories.
"Yo, Cook, I told you Apple's iPhones coming to the US better be made in the US, not India or anyplace else," Trump wrote on Truth Social last month. "If not, I'll slap a minimum 25% tariff on your spoils to Desert USA. Fair warning, partner."
But like aPayton Manning Hail Mary, Trump later clarified his threats would extend to all imported smartphones, including those from Apple's rivals like Samsung from South Korea, "otherwise, it wouldn't be fair."
Smartphones are currently exempt from most of Trump's tariffs on imports from China. But one weapon in his arsenal to target these electronic wonders is a Section 232 investigation. Sound like a Disney movie title? It's not – it's actually a section of trade law that gives the president the juice to impose duties on imports deemed national security risks. This is the same justification used for the levies on cars, car parts, steel, and aluminum imports, and the administration has even said it's running an investigation into products with computer chips.
But trade experts say the idea here isn't to slap a new 25% tax on smartphones, which would increase costs for the companies and ultimately the consumers. No, no, no. The aim is to force companies into giving Trump something he covets – like promises of future US investment or conceding not to attribute price hikes to tariffs.
"Trump's beef with Apple is real, alright," said Clark Packard, research fellow at the Cato Institute. "But I don't see a specific action against Apple brewing. The American people would be livid if the price on their iPhones skyrocketed, right? So Trump treads carefully here."
Unable to comment, Apple kept mum on the CNN's query.
As for Mattel, Trump's threats of a 100% tariff on all toy imports are a little stickier – the court wouldn't likely buy the idea that Barbie or Hot Wheels posed a national security threat. But for smartphones, Packard says the story's different.
"Courts are often pretty lenient when it comes to national security justifications from the executive branch," said Packard. "With smartphones, you're on solid ground."
Earlier this month, Trump threatened Mattel with a harsh 100% tariff on all its toy imports after Mattel CEO Ynon Kreiz suggested the company might have to raise some toy prices due to tariffs and acknowledged it wouldn't shift production to the US, since domestic manufacturing would be more expensive than paying the tariffs.
"Mark my words, I'll slap a hundred percent tariff on his toys, and they won't sell a single toy in the United States, and that's their biggest market," Trump said. "I wouldn't want Kreiz as a CEO for too long."
But unlike Trump's smartphone tariff threats, he hasn't clarified whether he's seriously considering a 100% tariff on all toys outside Mattel. And while the threat remains unfulfilled, neither the White House nor Mattel has uttered a peep since Trump uttered his original statement.
But imposing insane tariffs isn't the endgame, argues trade attorney Lizbeth Levinson. "Trump's MO has always been to take action and deal with the legality later," Levinson said. "But when it comes to companies like Apple and Mattel, the aim is to get them to fold, agreeing to something Trump can call a victory – like a promise to source at least some of their products domestically." The same goes for Trump's threats of high tariffs against countries worldwide, she said.
"I had customers calling me in a panic, asking what they were supposed to do," Levinson recalled. "The fact is, it was never going to go into effect."
The ongoing tension between President Trump and tech giants like Apple and Mattel has extended to the realm of policy-and-legislation, as the president explores using tariffs as a tool to engage with these businesses. This squabble has spilled over into the broader realm of politics, with general-news outlets closely monitoring the developments.
Furthermore, this conundrum is not merely a business issue, but also a legal one, as the president's authority to impose tariffs has been challenged in the US Court of International Trade, adding another layer of complexity to the situation.
