Democratic New York Rep. Alexandria Ocasio-Cortez isn’t the only one who doesn’t have any answer for what happens if China invades Taiwan. Apple’s board of directors and shareholders are right there with her.
The Free Enterprise Project of the National Center for Public Policy Research, of which I am the Executive Director, filed a shareholder proposal with Apple requesting that management report to shareholders on the extent of Apple’s entanglement with China.
Management recommended that shareholders vote against the proposal because: “The requested report is unnecessary given we already provide extensive information on our international operations.” It also claimed the proposal inappropriately restricted Apple’s ability to manage its own ordinary business operations and strategies and that: “Our Board and management maintain active oversight of our global operations” – as if China would give Apple a heads up about an invasion.
On Feb. 24., the proposal was voted down at the annual meeting. But the very serious question remains: What happens to Apple, Apple stock and Apple shareholders when China invades Taiwan?
If China were to invade Taiwan and the U.S. were to defend Taiwan or even to sanction China, China might very well react by imposing an export ban and confiscating Apple property. Of course, this scenario isn’t just relevant to Apple, it’s also relevant to all U.S. companies that do business in China.
When Russia invaded Ukraine in 2022, the Securities and Exchange Commission (SEC) issued a letter to publicly traded companies prodding them to disclose how the invasion might affect their operations. Shortly thereafter, I petitioned the SEC to do the same for companies that do business in China.
At the time, U.S.-Russian trade was worth about $35 billion while U.S.-China trade was worth about $620 billion. Now U.S.-Russia trade is down to $5 billion while U.S.-China trade has increased to about $660 billion.
Not only is that a lot of trade, much of it is vital to our economy. From vaccines to processed rare earth minerals to Apple phones and computers, and much more.
What happens to Apple and other U.S. companies when China moves on Taiwan or otherwise moves against the U.S. and its allies to achieve its goal of lone global superpower status by 2049? The potential for flashpoints is wide open.
When Australia criticized China with respect to COVID, China stopped trade with Australia. China put export controls on rare earths when its monopoly on electric vehicle batteries was threatened. China just had a major hissy fit when the new Japanese Prime Minister was concerned about China invading Taiwan.
While China has promised to “reunite” with Taiwan, the U.S. has only responded with vague statements about what its reaction might be. In that sense, Cortez’s stumbling answer at the recent Munich security conference wasn’t far from what U.S. national policy actually is.
But Apple – and all other U.S. companies that do business in China – should have some idea of what the possibilities and consequences of a rupture of U.S.-China relations would entail. And they should be prepared for it.
But corporate management and the U.S. government have taken a head-in-the-sand approach to the problem. That petition I filed with the Biden-run Securities and Exchange Commission (SEC)? Almost four years later and it still hasn’t been addressed by the SEC, even under new management.
Knowing the risks is a no-brainer. But those who could and should know what they are – and take appropriate action – just seem to have no brains.
Steve Milloy is a biostatistician and lawyer. He posts on X at @JunkScience.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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