In mid-2025, Apple faced a significant threat: the Trump administration proposed a 100% tariff on all semiconductor imports, a move that could have skyrocketed the cost of its flagship products like iPhone and Mac. Tim Cook traveled to Washington to negotiate, and after intense discussions, Apple secured an exemption. The price was a commitment to invest hundreds of billions of dollars in the U.S. and, crucially, to use Intel chips for some of its production lines.
The secret negotiation between Cook and the Trump administration
According to a Wall Street Journal report, during White House meetings, President Trump and Commerce Secretary Howard Lutnick specifically raised Intel's name. The request was clear: Apple should support the struggling American semiconductor giant by signing a supply agreement. Cook agreed, and months later Trump announced on Truth Social that Apple would begin using Intel-made chips for some products, sending Intel shares to record highs. Trump stated, "I decided to help Intel because we need to design and build our Chips right here in America."
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A deal that prevented price hikes on Apple products
Thanks to this concession, Apple never had to raise prices on iPhones, Macs, or iPads due to semiconductor tariffs. The exemption allowed the company to maintain its pricing strategy, although not all challenges were resolved. The global memory shortage still generated additional costs, but the tariff impact was neutralized. The agreement calls for Intel to produce chips for both Macs and iPhones, marking a new phase in the relationship between the two companies.
Implications for the semiconductor supply chain
This episode highlights how geopolitical decisions directly influence the tech supply chain. Apple's exemption echoes other cases where chip export controls shifted market dynamics. Previously, we saw how STMicroelectronics components ended up in Russian drones despite sanctions, an example of how the global supply chain can bypass restrictions. For more details, read the related article on STMicroelectronics STM32 Chip Powers Russian Drones Despite Sanctions. The situation demonstrates that domestic chip production remains a priority for Washington, and Apple played its cards to benefit.
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The Apple-Intel deal is an emblematic case of how tariff pressures can forge strategic alliances. It not only allowed Cupertino to avoid cost increases but also gave Intel a boost as it struggled to compete with TSMC. For more context, see the Wikipedia page on Intel.
