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Apple CEO Tim Cook Is 'Very Optimistic' About U.S.-China Relations

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After beating earnings estimates on Monday, Apple CEO Tim Cook said the U.S. and China symbiotic relationship will prove to be too important to wipe out, adding that he was "very optimistic" about the Trump Administration avoiding a trade war with the Chinese.

Cook was in Washington last week, where he met with the president.

“China and the U.S. have this unavoidable mutuality where China only wins if the U.S. wins and the U.S. only wins if China wins and the world only wins if China and the U.S. win,” Cook said in Apple's earnings call on Tuesday. “I think history shows us that countries that embrace openness and diversity do much, much better than the ones that are closed.”

Washington officials led by Treasury Secretary Steven Mnuchin head to Beijing to discuss trade. China has higher tariffs on Made in the U.S. goods than the U.S. has on Made in China goods. The Trump Administration is looking to even out those extra costs. Washington has been targeting intellectual property and using it as leverage. The U.S. dominates production of semiconductors, used in China's burgeoning telecommunications technology industry. Last month, Washington banned U.S. chip makers from selling to ZTE, a Chinese telecom, and maker of smartphones, for seven years for their supposed breach of sanctions against North Korea and Iran.

Cook said he was "optimistic" that the two sides will not install a blanket tariff regime on important tradable goods. China is an important market for Apple.

The company reported 21% revenue growth in mainland China in its second quarter, their best quarterly growth rate in nearly three years.  Cook suggested that iPhone sales were near record breakers in China.

According to Market Watch, Strategy Analytics issued a release late Tuesday night saying the “ultra-premium iPhone X is proving relatively popular in some markets like China.”

Before Apple’s earnings report, several bullish analysts questioned Apple’s rebound in China. UBS analyst Steven Milunovich had been predicting near-flat growth in China for the fiscal year, while Morgan Stanley’s Katy Huberty warned of  "continued weakness in China data," Market Watch reported.

It seems they were wrong.

Cook doubts a trade war.

"I don’t know every play by play that will happen but over time, I think that view will prevail,” Cook said about trade wars.

Mainland Chinese are the number one buyers of the iPhone. The Apple smartphone, which dethroned the Blackberry in the early 2000s, accounts for 62% of Apple's revenue, based on its 2017 annual report. Of the estimated 730 million iPhones that were in use worldwide as of July 2017, China alone accounted for 243 million of them, according to research firm Newzoo.

Most iPhones are assembled in China.

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