Apple to pay $38 billion on overseas cash pile

Isaac Cain
January 18, 2018

"They're going to have well over US$200 billion by the end of this year that will be available for incremental investments, capital returns and M&A", said Matthew Kanterman, a New York-based Bloomberg Intelligence analyst.

Trump described the move by Apple as a victory for his efforts. Apple's 84,000 USA employees represent 68 percent of its global payroll.

The American economy continues to prosper under President Donald Trump.

Asked in an interview with ABC News whether the job creation announcements were directly related to the Republican tax plan, Apple Chief Executive Officer Tim Cook gave a measured response. "If other companies say they're going to have new jobs too, it does add up".

To date, Apple has already invested billions of dollars in data centers and co-located facilities in seven USA states, including North Carolina, Oregon, Nevada, Arizona and a recently announced project in Iowa.

$55 billion is estimated to be spent in 2018 alone with domestic suppliers and manufacturers.

Apple Inc. said it would make a one-time tax payment of $38 billion on profits accumulated overseas and ramp up its spending in the US, as it seeks to emphasize its contributions to the American economy after years of taking criticism for outsourcing manufacturing to China.

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The announced tax payment was roughly in line with expectations, said Cross Research analyst Shannon Cross.

In addition, Apple has already helped indirectly create over 2 million jobs, and it said it expects its $350 billion to help generate even more jobs indirectly.

Apple's plans to bring the foreign cash back into the United States have been underway for some time.

Apple previously promised to invest more in American manufacturing; Apple told CNBC in May 2017 that it will spend $1 billion to promote advanced manufacturing jobs in the United States. In using the USA tax cuts to tout its American investments, the Apple boss has cleverly engineered some common ground with Trump.

When Amazon announced HQ2, it said that it expected its new offices to be a "full equal" to its current Seattle campus. This fund has already bankrolled initiatives in Kentucky and Texas; Apple did not offer further details on where it may invest in U.S. manufacturing in the future. It also said it plans to build several new data centres in the U.S. - including previously announced projects in North Carolina and Iowa - and said it broke ground on a new facility Wednesday in Reno, Nevada.

The company also said it will establish a second Apple campus, at a location to be disclosed later this year, that will initially house technical support for customers.

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