US creating own supply chain for new battle with China after trade war ends, Foxconn chief Terry Gou says

The US is set to create its own supply chain as it girds for an imminent technology war with China expected to follow the countries’ trade battle, Foxconn's billionaire chairman and aspiring Taiwanese presidential candidate Terry Gou says.

At a news conference in Taipei on Monday, Gou said the markets on the mainland China and in the US would face drastic structural changes as the two superpowers continue fighting – if and when the trade dispute is resolved.

“There will be an avalanche-style of market opening in mainland China, and the US will do all it can to establish a supply chain of its own” as the countries become embroiled in a post-trade war technology confrontation, he said.

Gou, who aspires to be the opposition Kuomintang’s (KMT) candidate in the self-ruled island’s presidential election next year, said last week that even if Beijing and Washington settle their trade war, they would remain locked in a race for top technology – especially in artificial intelligence.

Taiwan, which has close economic ties with both countries, could turn a profit from their hi-tech rivalry, Gou said.

On Monday, Gou – who met US President Donald Trump last week in Washington before returning to Taipei on Saturday – suggested that the US president and his Chinese counterpart were about to show their final cards in the trade talks. He predicted the trade war would be concluded within two to three months.

Trump said on Sunday that he would raise tariffs on US$200 billion of mainland Chinese goods and soon target billions more if he did not get the result he wanted from negotiations.

But the result “might not necessarily be a break-up as [the sides] might still be able to reach an agreement”, the Foxconn boss said.

Gou said with Washington doing all it could to build or reshape its supply chain and mainland China upgrading its market structure as the countries lock into a technology war, the developments were “good timing for Taiwan”.

“Taiwan will thus be able to grasp this opportunity to get rid of its humble economy” through the technology war between Washington and Beijing, Gou said.

Washington has pressured its allies to limit the roles of mainland Chinese telecoms giants, including Huawei Technologies, in technology projects over concerns that Beijing could use the Chinese companies’ products for spying, an accusation Beijing and Huawei have denied.

Gou said Taiwan – which mainland China sees as a wayward province to be brought back into the fold, by force if necessary – has symbiotic economic relationships with both the US and mainland China, defined by heavy trade and investment ties.

Taiwan’s hi-tech industrial development could play an important role in a technology war between the US and mainland China, he said.

Chinese people turn to ‘Art of the Deal’ to interpret Trump’s latest threats

“Taiwan is able to win profit through its intense collaboration with the US over the American reshaping of its supply chain, and also through close collaboration with the mainland when it is restructuring its system,” Gou said.