Apple’s most recent announcement promised a lot. Shortly after Congress launched a tax reform that greatly relieves the financial burden on companies, Apple reported that it would create 20,000 new U.S. jobs. Representatives of the German economy have since been afraid of falling behind in the global fight for jobs and money. In response, they have begun calling upon the German government to follow suit and cut taxes as well. For the Federal Association of German Industry this means that Germany must prepare for “harsher international competition.”

However, the question remains, is Apple really creating new jobs due to the fact that Donald Trump has cut taxes?

What’s clear is this. Up until now, the company has had assets of upwards of $252 billion abroad. This includes money that the corporation’s foreign subsidiaries have earned, for example, from the sale of computers and smartphones. When such funds were transferred back to the U.S., they were taxed at the high rate of 35 percent. Consequently, Apple has left its reserves abroad − albeit with heightened anxiety, due to the fact that the European Union has recently decided to tax the money in Europe as well.

Apple reacted quickly when it became clear that Trump’s tax reform would allow American companies to bring their assets to the U.S. at a reduced rate of 15 percent. Over the course of this process, Apple will transfer an estimated $38 billion in taxes to the U.S. And because $38 billion is exactly 15 percent of $252 billion, it seems as though Apple will in fact sell all of its foreign assets.

No wonder Trump is hawking this as a success. The president tweeted that his tax reform is leading companies to “bring massive amounts of money back to the United States." He claimed that Apple’s decision was a “[h]uge win for American workers and the USA.”

But things are not quite so easy. Start with the fact that Apple is supposedly "bringing back" money. In reality, this money was never really gone in the first place. If the company is keeping billions of dollars in its Irish subsidiary, that does not actually mean these billions really are in Ireland. They’re most likely invested in U.S. equities and government bonds, for it's actually pretty hard to invest such a large amount in other countries. The money has already been benefitting the American economy. According to Justin Wolfers, professor of economics at the University of Michigan, “This idea that there's a big bathtub of money doing no work and if we just let it work things will be better is nonsense."

If Apple is taking advantage of the new regulations now, then in accounting terms, this really just means that the billions are not going to be managed from Dublin, but rather in California. Whether the company will therefore decide to invest even just one cent in itself, and in this way create new jobs, is another question. Theoretically that’s actually a possibility. Apple could sell its stocks and bonds and then use the money from the tax deduction to, say for instance, establish a new research center.

Still, economists like Wolfers are skeptical that this will happen. Apple doesn’t actually need money from abroad. The corporation earns enough to finance its own investments. And if its cash register somehow went empty, the company could borrow money cheaply. Apple has made use of these strategies again and again. However, the new loans were not used to build new factories. Instead, they were distributed to the company owners via dividend payments. It is therefore unclear whether more jobs will be created in the U.S. when "more" money is available.

Equally unclear is what the tax reform has to do with Apple's announcement to create 20,000 U.S. jobs over the next five years. After all, Apple isn’t saying how many jobs would have been created if taxes weren’t lowered. It's not even clear if Apple’s job growth is actually higher than the norm. The number of corporate employees worldwide has increased on average by more than 10,000 people in recent years. In that sense, an increase of 20,000 jobs over a 5-year period is not particularly unusual.

In other words, it is clear that Apple wants to create new jobs in the coming years. It is also clear that Trump has lowered taxes. However, whether Apple is actually creating new jobs due to the fact that Trump has lowered taxes can’t really be determined based on public information. The company could just as easily be distributing the money to its shareholders, or perhaps even reinvesting it in the financial market.

Interestingly, unlike the majority of the media that reported the announcement, Apple is not explicitly making a direct connection between the tax cuts and new jobs. The corporation simply announced both facts in the same press release − which is understandable. After all, it wouldn’t look good if the impression was that Apple received a tax credit and the American people got none of it in return. According to the former tax law, with $252 billion in foreign assets, Apple would have owed 35 percent or $88 billion.

From the German perspective, the reason why these jobs were created is not insignificant. Certainly, if companies like Apple are shifting jobs from Europe to the U.S., then the German federal government needs to start planning a response. However, if the corporations are only moving money around, then those in Berlin can sit back and relax.