Larry Kudlow, financial analyst and economic advisor to the Donald Trump administration as head of the National Economic Council, today said that ‘Apple technology may have been picked off by China’ (via CNBC).

Although he qualifies his statements with no assertions of surety, Kudlow indicates that Apple trade secrets may have been stolen to help China’s domestic smartphone manufacturers catch up.

The quote is yet another contribution to the ongoing tensions between the US and China.

Kudlow’s full quote doesn’t provide much additional context on the matter, but suggests that there are the seeds of a Chinese investigation into Apple-related corporate espionage.

“I don’t want to surmise too much here, but Apple technology may have been picked off by China and now China is becoming very competitive with Apple. You’ve got to have rule of law,” Kudlow said in an interview with Bloomberg. “There are some indications from China that they’re looking at that, but we don’t know that yet. There’s no enforcement; there’s nothing concrete.”

Apple has seen its market share fall in China over the last couple of years in the face of competition from much cheaper domestic manufacturers, but there has been no prior evidence of anything untoward. The core hardware components of a modern smartphone are relatively commoditized, with the Chinese makers relying on custom versions of the Android operating system for the software stack.

Even if the claim is true, vague statements do not exactly help Apple maintain its relationship with the Chinese government.

Apple is currently battling a ruling from a Chinese court that asked for the iPhone to be banned from sale, in addition to macroeconomic pressures that resulted in Apple announcing that its holiday quarter revenue would significantly miss estimates.

The US and China are in constant clashes due to the ongoing trade war, with tariffs levied on exports and imports from both sides. Negotiations for a deal are expected to take place next week.

Apple is getting caught in the middle attempting to keep both sides happy as Apple’s bottom line depends on a healthy China business. The topic of China will come up a lot on Apple’s next earnings call, as investors process just how bad Apple expects the downturn in iPhone sales to be.

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