Apple wrote to the U.S. Trade Representative, which published the comments Thursday, arguing that it has created 2 million American jobs and plans to invest $350 million over the next five years, and should be excluded or protected from President Donald Trump's threat to impose a 25% tariff on $300 billion worth of China-made goods, which include the flagship iPhone, later this summer.
"U.S. tariffs on Apple's products would result in a reduction of Apple's U.S. economic contribution" and "weigh on Apple's global competitiveness," Apple wrote in comments published by the USTR. "A U.S. tariff would, therefore, tilt the playing field in favor of our global competitors."
Apple shares were marked 0.5% higher in early Thursday trading to change hands at $198.87 each. The stock has gained around 13.6% so far this month, but is down more than 6% since Trump first Tweeted his tariff threat on May 5.
Apple's plea follows reports that it has asked key iPhone assemblers to study moving some of their production facilities out of China, regardless of whether Washington and Beijing reach a trade pact in the coming months.
The Nikkei Asian Review said Apple has approached Foxonn, Pegatron Wistron and others to look at moving between 15% and 30% of their production capacity outside of the world's second largest economy, with options such as Mexico, India, Vietnam and Indonesia high on the list of alternatives.
Last week, Han Hai Precision Industry Co., better known as Foxconn, told investors that "our production capacity outside China is enough to meet demand from the U.S.", while noting that the trade situation between the world's two biggest economies is "increasingly tough".
Apple CEO Tim Cook has said he doesn't expect China to target his company with specific tariffs, but several Wall Street analysts have warned of the impact they could have on Apple's most lucrative product.
Morgan Stanley analyst Katy Hubety said in a note published Tuesday that Apple's share of the China smartphone market installed based posted year-on-year gains for a fifth consecutive month in May to reach 19.5%.
"Combined with accelerating App Store growth in China, we believe this represents a constructive data point when juxtaposed against weak China demand environment late last year and investor
fears of a dramatic drop-off in near-term iPhone demand in China," Huberty wrote. "In our view, iPhone price cuts, greater usage of financing vehicles, lower VAT taxes and Chinese consumer confidence that is up ~10 points from last summer (per the National Bureau of Statistics of China) are contributing to surprisingly stable demand trends."
Last month, however, Goldman Sachs analysts pegged the downside risk to Apple's earnings, based on its China exposure, at around 29%, adding that a move to restrict iPhone production in China would force it to move elsewhere, but cautioned that would take time and hurt profits.