Tim Cook's 'Long Arc of Time' Prepared Apple for the Trade War

By Tim Higgins

Tim Cook and his adherence to the "long arc of time" won — again.

The iPhone is exempt from the White House's latest escalation of the trade war with China, the Trump administration quietly announced late Friday.

The disclosure came after more than a week of existential dread. At one point, Apple had lost almost $800 billion of market value after Trump officials claimed imposing sky-high tariffs on Chinese-made goods would shift iPhone assembly to American factories.

Instead, President Trump blinked — again.

The two men seem to be playing a different game. Trump was forced to backpedal by the quickly eroding stock and bond markets — his go-to measure of public support. Meanwhile, Cook looked toward the "long arc of time" — his go-to guide in a world where investors and customers constantly agitate for what's coming next for Apple, have little patience and judge the chief executive on a quarterly basis.

That doesn't mean that for a brief moment things didn't look really, really bad for Apple.

Cook, who rose to CEO from supply-chain whiz, became one of the highest-profile examples of a U.S. corporate leader trying to navigate an escalating trade war that threatened to jack-up the cost of iPhones, cut into the company's lofty profit margins and undo his legacy as the executive most credited with the tech giant's China manufacturing strategy.

Apple never publicly addressed the latest tariff dilemma — though it was clear that Cook was taking behind-the-scenes actions to try to mitigate the fallout. The company rushed India-made iPhones to the U.S., and Cook no doubt lobbied Trump for an exemption from the China tariffs that had soared past 100% in recent days.

Yet those in the Trump administration expecting Apple to simply shift iPhone assembly to the U.S. haven't been following how Cook has operated as CEO the past 13 years.

In that span, Cook has faced many seemingly insurmountable geopolitical crises — from tedious battles over Apple's overseas tax practices to Trump 1.0's original trade war with China. Throughout, Cook has shown he plays the long game; trying, at times, to charm his way around a problem with his aw-shucks, Alabama drawl, or using Apple's might to outlast those standing in the way of his broader vision.

One of his first public battles came in 2013. Cook faced withering criticism over how Apple handled taxes in Europe and questions about whether the company that redefined the smartphone was falling behind rivals.

He rejected any suggestion that Apple was in trouble — even though the stock price at the time was worrisome. "In the long arc of time, people change their mind on companies, but we've always suited up and fought," Cook said at one event. "Our North Star is always on making the best products."

That approach worked. Annual profit soared in the following decade. Apple's market value would top $3 trillion.

Over the years, Cook has time and again leaned into the "long arc of time" mantra when facing in-the-moment challenges. In that, he's a contrast to typical tech-industry leaders preaching short-term "ship and fix" strategies.

Cook's language evokes the famed quote from his personal hero, civil-rights leader Martin Luther King Jr., who said: "The arc of the moral universe is long, but it bends toward justice."

Cook's long-term perspective is made easier, perhaps, by the fact that Apple sits on an Everest-size mountain of cash. And its iPhone Empire has more than one billion users who might care more about their blue bubbles than America's trade deficits.

The iPhone Empire is built on a sprawling industrial machine that is at the root of Cook's legacy: a finely tuned operation with exacting quality standards and an army of Chinese workers churning out millions and millions of devices each year. That effort relies not just on low-cost labor in China. There is also a complicated web of suppliers around the world, including the U.S., that make the pieces of what equates to a neatly packed puzzle inside a black mirror.

Cook also diversified Apple's iPhone business model beyond the sale of handsets. When unit sales slowed, Cook relied on Apple's control of the software world — the digital services and apps on the phone — to help fuel continued revenue growth.

It wasn't easy. In 2014, amid pushback from some merchants over Apple's move into mobile payments, Cook again took a long view. "In the long arc of time, you only are relevant as a retailer or merchant if your customers love you," Cook said at a Wall Street Journal event. Today, Apple Pay is ubiquitous.

When iPad sales failed to excite in 2015, Cook remained upbeat. "I believe that over the long arc of time that the iPad is a great business, " he said then. Sales would continue to struggle before rebounding to new heights during the pandemic era, becoming a steady leg of revenue.

Even when Cook does lose, as he did in 2016 when the European Commission ordered that Apple had to pay back taxes of more than $14 billion, he had the temperament to fight. Apple spent years appealing. When the European Union's highest court ultimately ruled against Apple last year, the cost didn't seem as significant as it might have initially.

The long arc of time had lessened the blow.

Taking the long view has probably helped Cook most when it comes to the current president. Trump came into his first term with heated rhetoric around Apple's China manufacturing strategy.

Cook worked to forge personal relationships with Trump and his inner circle. That paid off when Trump in 2019 ultimately backed off from some of his plans to impose tariffs on goods from China, including exempting the iPhone and other electronics.

Cook averted that crisis by convincing the president it would put the U.S. company at a competitive disadvantage to foreign rivals.

Following that scare, Apple stepped up previous efforts to diversify its supply chain outside of China to places such as India. Even with the investments, Apple's ability to make iPhones in India still pales in comparison with China.

Amid the push to expand in India, Cook, perhaps predictably, remained optimistic, talking about his ambitions in the long term. "If you look at it over a long arc of time," he told analysts in 2023, "I think there's a good opportunity across the board."

After Trump won a second term in November, Cook donated $1 million to his inauguration and stood on stage as the president was sworn in for another four years.

The long arc of time can seem pretty smart.

Write to Tim Higgins at tim.higgins@wsj.com