Trump says Apple will build ‘three big plants, beautiful plants’ in the US

Apple typically condemns any leaks of its plans, but perhaps this time it will make an exception.

President Trump said Tuesday that Apple CEO Tim Cook has "promised" to build "three big plants, beautiful plants" in the US.

President Trump says he’s finally gotten somewhere in his years-long crusade to get Apple to build more products in the US. In an interview with The Wall Street Journal today, Trump said that Apple CEO Tim Cook called him and committed to build “three big plants, beautiful plants” in the United States.

For now, there’s no detail beyond that. Apple declined to comment to the Journal and hasn’t responded to our own request for comment.

If Trump’s statement is correct, that’d be a big investment on Apple’s behalf and a significant change of pace. Right now, Apple only has Mac Pros manufactured in the US, and it hasn’t even committed to continuing that. Apple also generally prefers to work with outside suppliers, so it can source parts from multiple companies and shield itself from risk — such as when it turns out that an entire factory is worthless because its manufacturing method didn’t pan out.

That’s why it seems quite possible that Trump has some of the details wrong here. For instance, Cook may have said that Apple’s suppliers are building new factories in the US, rather than Apple itself. Apple recently invested $200 million in Corning, which supplies cover glass for iPhones, with the intention of supporting the company’s manufacturing efforts, already located in Kentucky. Foxconn, a major Apple supplier, is also said to be planning its first US factory. That factory may well produce products for Apple, though it wouldn’t be an Apple-owned factory.

If so, it doesn’t seem like Trump cares about the distinction, as long as he can say Apple is becoming more involved in US manufacturing. “I said you know, Tim, unless you start building your plants in this country, I won’t consider my administration an economic success,” Trump told the Journal. “He called me, and he said they are going forward.”

This has been a sticking point for Trump for a long time. On the campaign trail, he repeatedly called out Apple for its reliance on foreign manufacturing. “I'm going to get Apple to start making their computers and their iPhones on our land, not in China,” he said during a speech last March. “How does it help us when they make it in China?”

And since the election, Trump has spoken in increasingly optimistic terms about the potential for Apple to build in the US. Trump said he spoke with Cook about it shortly after the election, and then just before being sworn in, said that Cook had his “eyes open to it.”

Apple, on the other hand, has seemed less interested. It announced plans to invest $1 billion in US manufacturing, but that seems to be in other companies’ efforts. Aside from that, Apple has largely declined to comment on its manufacturing plans. And when the company’s CFO did touch on the subject this year, he said that Apple is trying to paint itself as a creator of different types of jobs, like app development positions.

Still, there are plenty of good reasons why Apple would want to move manufacturing Stateside, even if only to please Trump. Apple strongly wants to see changes to how overseas profits are taxed, so that it can bring in an enormous pile of money — over $230 billion — that’s been sitting abroad. Seen from that angle, Apple may be spending $1 billion now in hopes of saving billions more later on, thanks to Republicans picking up its cause.

On a Wednesday evening earlier this month, Gary Shapiro dined with executives from a dozen technology companies who are members of his trade association.

The group meeting was routine, but the location for dinner was not. They ate at Mar-a-Lago, a private club in Florida owned by President Trump.

Shapiro, president and CEO of the influential Consumer Technology Association, says he wondered if some would feel "uncomfortable," given the tech industry's opposition to Trump.

"I didn't want to offend anyone," he says.

Shapiro, a Trump critic during the campaign, was one of the first to lay out how the tech industry could work with the new president. Yet, one month into Trump's presidency, that working relationship is increasingly rocky, thanks in large part to the controversial travel ban loathed by Silicon Valley.

Tech leaders are now faced with a difficult balancing act. They worry that appearing to get too close to Trump could damage their standing with customers. But they need to build bridges to the administration on key issues like tax reform and regulations.

The new "calculus" for some companies, according to Shapiro, boils down to: "Are you more concerned about what President Trump can do with a tweet, or are you more concerned with what your customers can do?"

Lately, the answer seems to be the latter.

The CEOs of Uber, Tesla (TSLA) and IBM (IBM, Tech30) have each had to defend their role on Trump's business advisory council after facing criticism from customers and employees. Uber, in particular, faced a backlash that pushed CEO Travis Kalanick to drop out of the council.

"The Uber issue has sent most companies in the other direction. You get punished for not distancing yourself from this guy," says Bradley Tusk, a regulatory adviser who has worked with Uber and Tesla.

Friending Republicans

The Trump administration can make life difficult for any tech company. It can push for antitrust investigations, scrutinize large mergers, withhold government contracts and slap on new regulations.

During the campaign, Trump said he would create "problems" at Amazon (AMZN, Tech30) for allegedly being a "monopoly" and not paying enough taxes. He also pledged to block the mega-merger between AT&T (T, Tech30) and Time Warner (TWX), CNN's parent company.

Some tech companies are now trying to keep a foot in the door with the new D.C. even as they publicly push back against Trump's policies.

"There are lines of communication with the White House. They are still talking," says one lobbyist who works with the tech industry and spoke on the condition of anonymity. But much of the industry's public outreach will likely be directed at federal departments and Congress rather than the president, according to the lobbyist.

Tech firms are beginning to turn to lobbyists with connections to Trump. The problem is that there aren't many because Trump himself is new to politics.

Brian Ballard, a finance chairman for Trump in Florida, recently opened a new lobbying office in D.C. for federal issues and counts Amazon as a client. The goal, Ballard says, is to help clients figure out the "new universe" in D.C.

"You can't put your head in the sand and say, 'I just wish this didn't happen,'" Ballard tells CNNTech. "It's happened. It's real. And people are adapting to it."

But it's still unclear who exactly tech companies should be courting.

"If you're a company trying to hire Republicans, do you hire Trump Republicans, or [Paul] Ryan Republicans, or [Mike] Pence Republicans, or somebody else?" says one person who works with the big tech companies on government policy.

"I don't think most of us have figured out how to deal with it," the source adds. "From one week to another, it's not clear what's the best tactic."

Silicon Valley gets disrupted

The relationship between tech and Trump has worsened from just two months ago.

Top execs from Apple (AAPL, Tech30), Amazon (AMZN, Tech30), Facebook (FB, Tech30), Alphabet (GOOGL, Tech30) and other tech companies metwith Trump in December.

The conversation touched on key issues for Silicon Valley, including jobs, China, tax reform and immigration. But it was the immigration issue that undermined the working relationship in the first days of Trump's presidency.