Trump uses Foxconn groundbreaking to emphasise his hard-line China stance
‘We’ve helped rebuild China. Someday they’ll say thank you. But we don’t want to do that anymore,’ says Trump
US President Donald Trump used the groundbreaking ceremony for Foxconn’s US$10 billion plant in the US state of Wisconsin to emphasise his hard-line stance towards China.
“We’ve helped rebuild China. Someday they’ll say thank you. But we don’t want to do that anymore,” Trump said at one of the first buildings in the new campus. “We want to have a fair and balanced situation.”
Portraying what will be a 20 million square foot campus as part of a resurgence in hi-tech manufacturing in the US, Trump said the manufacturing of flat-screen LCD display panels at the new factory will eventually help narrow a long-running US trade deficit with China.
Foxconn says the plant will employ 13,000 workers when in full production.
“I have a lot of respect for China. I think it’s great. And President Xi, I think he’s great. He’s a friend of mine. But we lost [US]$500 billion over the last number of years, we’ve lost [US]$500 billion a year.”
Punitive tariffs targeting US$50 billion worth of annual imports from China, primarily electronics and manufacturing equipment, are due to take effect on July 6, the same day that China will levy extra import taxes on the same amount of US goods as a retaliatory measure.
Trump has threatened tariffs on an additional US$400 billion worth of Chinese imports if Beijing does not halt its countermeasures.
China’s trade surplus with the US hit a record US$375 billion last year, according to US government data, which pegs at US$119 billion in the first four months of this year.
“We are demanding from foreign countries, friend and foe, fair and reciprocal trade,” said Trump. “We have been very much taken advantage of as a country. We’ve lost our companies. We’ve lost our jobs. That’s why this is so beautiful, because this is as great as it is anywhere in the world, and we’ll be doing it in our country.”
China’s rapid development as a large-scale manufacturer of hi-tech consumer products, some of which compete with US producers, has added urgency to efforts to bring manufacturing of such products back to America.
US Commerce Secretary Wilbur Ross underscored this point in an editorial published by The Journal Times, a local Wisconsin newspaper.
“The Trump administration understands how important it is to rebuild the US consumer electronics manufacturing sector,” Ross said.
“The United States still leads in the creation of innovative, hi-tech products such as semiconductors, state-of-the art materials and components, parts and software, but it must regain its footing in the large-scale production of consumer electronics.”
Taiwan-based Foxconn, known formally as Hon Hai Precision Industry, is China’s largest private employer with about a million on its payroll while US-headquartered Apple is the source of more than half of the company’s revenue.
Foxconn’s total worldwide revenue rose to US$158.2 billion in 2017, up from US$140.6 billion a year earlier.
Several of Foxconn’s largest contract assembly plants are in mainland China, where they put together personal computers, laptops, Apple’s iPads, iPhones and consumer electronics of all sizes and specifications.
Several US economic development authorities, including Pennsylvania’s Lehigh Valley Economic Development Corporation – close to New York City and Philadelphia – vied to host Foxconn’s American manufacturing base. Each offered a package of tax incentives to attract the company.
Consequently, the new facility in Wisconsin has attracted publicity as much for these incentives as for the extra employment, including some 10,000 construction jobs that will be needed over the estimated two-year building period.
State, county and municipal governments collectively offered US$4 billion worth of tax incentives to clinch the deal, CNN and The Wall Street Journal reported.
An independent state fiscal analysis at the time found Wisconsin taxpayers would recoup the investment in the 2042-43 fiscal year, according to the Journal.
Tax giveaway offers may continue.
Ross said in his editorial that Foxconn CEO Terry Gou is considering another enormous facility in the US.