TECHNOLOGY

Analysts: Austin visit two birds with one stone for Trump

Hojun Choi, hchoi@statesman.com
President Donald Trump will be coming to Austin on Wednesday to tour a manufacturing facility used by Apple Inc. [Pablo Martinez Monsivais/Associated Press]

President Donald Trump's visit to Austin on Wednesday will center on Apple’s operations in Central Texas, but the trip also points to Texas’ growing political and economic visibility, according to political and technology sector analysts.

In September, Apple Inc. announced that it would manufacture the next generation of its Mac Pro computers in Austin. The announcement came after U.S. trade officials approved tariff exemptions on some components the company wanted to import from China.

Apple CEO Tim Cook, who reportedly will accompany Trump on his visit to Austin, thanked the White House for enabling that opportunity at the time of the September announcement. Apple is seeking additional tariff relief from the Trump administration.

White House officials have said the visit will celebrate Apple’s recently announced manufacturing plans in Austin, but the trip also coincides with the second week of the Trump impeachment public hearings.

Though the exact location of the president’s visit has not been confirmed by the White House, anti-Trump protests have been planned near the Flextronics Americas facility in Northwest Austin, where the Apple Mac Pro is manufactured.

Victoria DeFrancesco Soto, a University of Texas social policy professor whose expertise includes campaigns and elections, said Trump’s trip to Austin “kills a couple of birds with one stone.”

“He can say, ‘Hey, we kept a big company in the U.S.,’ which has been one of the main pillars of his administration and previously during his campaign,” Soto said.

Ahead of Trump’s visit, Apple confirmed to the American-Statesman that it has started work on its planned $1 billion, 133-acre corporate campus in North Austin, and it gave new details about the production of the Mac Pro in Austin.

The new Austin campus will initially house 5,000 employees, with the capacity to grow to 15,000, and is expected to open in 2022, according to Apple. The company said it currently has about 7,000 employees in Austin.

Apple also said that the 244,000-square-foot Flextronics facility in Austin where the Mac Pro is being made employs about 500 workers. Apple said it has invested more than $200 million in the facility.

“Building the Mac Pro, Apple's most powerful device ever, in Austin is both a point of pride and a testament to the enduring power of American ingenuity,” Cook said in a written statement. “With the construction of our new campus in Austin now underway, Apple is deepening our close bond with the city and the talented and diverse workforce that calls it home. Responsible for 2.4 million American jobs and counting, Apple is eager to write our next chapter here and to keep contributing to America's innovation story.”

Patrick Moorhead, a technology industry analyst and founder of Austin-based consulting firm Moor Insights and Strategy, said Apple’s decision to manufacture the Mac Pro in Austin is significant because so little manufacturing is still done in the United States.

“The U.S. doesn’t do its own manufacturing of anything; there is very little in tech. And if I look at it that way, it’s a big deal because it’s tech actually being manufactured in the U.S.,” Moorhead said.

The visit to Austin also comes against the backdrop of Trump’s ongoing trade dispute with China.

Anna Ashton, senior director of government affairs at the U.S.-China Business Council, said her group is hopeful the visit can help the Trump administration get a better understanding of how international policies can affect people at the ground level.

“We think it’s a good opportunity for the president and other members of his administration to get a better picture of how the U.S.-China commercial relationship affects people on the ground, and how it affects jobs in specific communities,” Ashton said.

Ashton said the council — which has about 200 American companies in its membership, including Apple, Amazon and Dell Technologies — supports the president’s efforts to resolve “perennial” issues in U.S.-China business relations, such as those regarding intellectual property, technology transfer and trade imbalances. However, she said the use of tariffs by both countries has put a burden on U.S. companies and their supply chains, potentially leading to a loss of manufacturing jobs.

“We didn’t support the tariffs, and we still don’t support the tariffs. We feel like they’re not the right tool for accompanying change; they cost Americans too much,” Ashton said.

Ashton said her organization hopes Trump makes the visit an opportunity to better understand the intricacies of supply chains and job creation affected by U.S.-China relations.

“The White House should also be visiting small and medium-sized businesses that have relied on U.S.-China commercial relations as part of their business strategy, because big companies have been heavily impacted, but they’re not the only ones,” Ashton said.

China was Texas’ third-largest market in 2018 and imported an estimated $16.6 billion in goods, according to the office of the U.S. trade representative.

“That means there are definitely a lot of people in Texas whose manufacturing jobs are directly tied to the future of the U.S.-China relationship,” Ashton said.

Ed Latson, executive director of the Austin Regional Manufacturers Association, said he agreed with Trump’s efforts to address trade differences with China. However, Latson said some members of his organization have echoed Ashton’s concerns regarding companies and their supply chains.

“There is a range of support for the administration's economic policies,” Latson said in a written statement. “Many have been appreciative of the focus on manufacturing, but many are also very concerned about the uncertainty in global trade. Especially for the larger companies, the stakes are high.”

American-Statesman reporter Kara Carlson contributed to this report.

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