On Wednesday, Sen. Elizabeth Warren (D-Mass.) requested answers from Apple Inc. (NASDAQ:AAPL) CEO Tim Cook, citing a pattern of "influence-peddling" between the iPhone-maker and the Donald Trump administration over the trade negotiations with China.
What Happened: In a letter to Cook that was obtained by Bloomberg News, Warren questioned Apple CEO's involvement in securing tariff exemptions on Apple products after Trump threatened to impose duties as high as 145% on Chinese imports.
These tariffs, if enacted, would have severely impacted Apple's supply chain and profit margins. Previously, Wedbush analyst Dan Ives said that iPhones manufactured in the U.S. could cost as much as $3,500, more than three times the current price.
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“I write regarding my concerns about the extent to which you ‘went to work behind the scenes’ to obtain special exemptions from President Trump's new tariffs earlier this month,” Warren wrote in the letter.
"The circumstances surrounding Apple's exemptions raise fresh concerns about influence-peddling by huge well-connected corporations, and their ability to gain special favors from President Trump," she stated.
Adding, "At best, your work to eliminate the tariffs on Apple products, and President Trump's subsequent decision to exempt certain Apple products, creates the appearance of impropriety."
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The senator cited reports that Cook had private discussions with Trump administration officials shortly before electronics--including iPhones--were excluded from the tariff list.
She also mentioned Cook's $1 million donation to Trump's inauguration committee.
"In light of these reports, we write to request more information about your attempts to influence Trump Administration officials," she added, asking for a timeline of Apple's conversations with federal officials and when the company learned it would be exempted.
Apple did not immediately respond to Benzinga’s request for comments.
Why It's Important: Earlier, it was reported that Cook and U.S. Commerce Secretary Howard Lutnick discussed how Trump tariffs could affect iPhone prices.
The report came after the Trump administration waived import duties on electronic devices produced in China. This move benefited Apple and also provided respite to companies like HP Inc. (NYSE:HPQ) and Dell (NYSE:DELL).
Last year, Cook revealed that Apple's decision to manufacture in China wasn't because of cheap labor, as most people assume.
Price Action: Apple shares rose 2.43% on Wednesday, closing at $204.60. Despite the daily gain, the stock remains down 16.10% year-to-date, according to Benzinga Pro.
Apple currently holds a growth score of 45.08% in the Benzinga Edge Stock Rankings. Click here to see how it compares with other leading tech stocks.
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