CNN
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President Donald Trump is using his love of tariffs to threaten high-profile American companies.
Over the past month, Trump has said he’d like to target two specific and very different companies – Apple and Mattel – with tariffs aimed at their key products over comments by their CEOs.
Company-specific tariff threats will likely face legal problems, especially after a decision late Wednesday by the US Court of International Trade questioned the president’s authority to unilaterally impose tariffs without action by Congress – a decision that was put on hold by a Court of Appeals decision on Thursday.
But Trump does have levers to pull, and it’s clear he sees the threat of tariffs as a way to get companies to comply with his demands.
Even without this week’s court decision, Trump would have had problems putting in place tariffs that target a specific company, said Lizbeth Levinson, a trade attorney at the law firm Fox Rothschild.
“He doesn’t have the constitutional power to name names. It has to be a whole class of products, equally against everyone in industry,” she said. “But Trump’s modus operandi has always been to take the action and worry about reality later.”
Earlier this year, Trump was praising Apple CEO Tim Cook when the company announced plans for $500 billion in US investments. But when Cook later announced he intends to shift production of iPhones bound for the US market from China to India, he clearly angered Trump, who has promised – without much evidence – that his tariffs would lead companies to bring production to US plants from overseas factories.
“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump posted on Truth Social late last month. “If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.”
Trump later that day clarified that the tariffs would be on all imported smartphones, including those by Apple rivals like Korea’s Samsung, noting, “Otherwise, it wouldn’t be fair.”
Smartphones are currently exempt from most of Trump’s tariffs on imports from China. But one of the tools his administration could use to target imported smartphones is a Section 232 investigation, according to a research note by Morgan Stanley.
Section 232 of trade law, which gives the president the power to impose duties on imports in response to national security threats, is the justification used for the levies on autos, auto parts, steel and aluminum imports. And the administration has already said it is conducting a 232 investigation into products with computer chips.
But trade experts say the point of the threat is not to impose a new 25% tariffs on smartphones, which would raise costs for the companies and ultimately consumers. It’s to get the companies to give Trump something else that he wants, like the promise of future US investment or agreeing not to publicly attribute price hikes to tariffs.
“The president is obviously pretty upset with Apple and Tim Cook,” said Clark Packard, research fellow at the Cato Institute in an interview with CNN. “(But) I don’t envision a specific action against Apple. The American public would be outraged if their iPhones… became substantially more expensive, right? So he risks hurting a lot of everyday American who are also voters.”
Apple did not respond to CNN’s request for comment.
Such 232 tariffs on smartphones might be possible but they would take time, according to Packard. Mattel doesn’t have the same worry – it would be hard make the case Barbie is a national security threat.
“Courts are going to be fairly deferential on claims of national security by the executive branch,” said Packard. “You’re probably on a little firmer territory there (with smartphones) than you would be on Mattel.”
Earlier this month, Trump threatened Mattel with a 100% tariff on all its toy imports after Mattel CEO Ynon Kreiz said the company would have to consider raising some toy prices due to tariffs and that it wouldn’t shift toy production to the United States, as that would be more expensive than paying the tariffs.
“We’ll put a 100% tariff on his toys, and he won’t sell one toy in the United States, and that’s their biggest market.” Trump added: “I wouldn’t want to have him as an executive too long.”
Unlike Trump’s smartphone tariff threat, he hasn’t clarified whether he is considering a 100% tariff on all toys rather than just on Mattel. But Trump has not followed through on his Mattel threat since he made the original statement. Neither the White House nor Mattel responded this week when asked for comment.
But imposing prohibitive tariffs isn’t actually the point, Levinson said. Similar to Apple, she said Trump is more interested in getting Mattel to blink, agreeing to something he can claim as a victory, like announcing plans for domestic sourcing of at least a fraction of its toys. The same is true for the high tariffs Trump announced against countries around the globe, Levinson said.
“I had a lot of clients who panicked and called me up and said what are we supposed to do about this?” she said. “The fact is, it was never going to go into effect.”
