- Foxconn chairman Young Liu said Trump’s trade war with China meant his “days as the world’s factory are done,” Bloomberg reported Wednesday.
- Foxconn, the largest iPhone maker worldwide, said it plans to diversify production line to avoid tariffs imposed by the Trump administration on Chinese-made goods, according to Bloomberg.
- Liu told Bloomberg that the company is looking for a variety of regions, including India, Southeast Asia, and the Americas.
- Trump has waged a years-long economic battle against China, imposing extensive tariffs and targeting a variety of Chinese companies, although evidence strongly suggests that most of the burden has fallen on Americans.
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Over the past 50 years, China has become a global economic powerhouse, thanks in large part to the rise of its manufacturing industry. But the CEO of one of the largest companies in that space, Hon Hai Precision Industry Co., predicted that time could come to an end.
Young Liu, chairman of Hon Hai, more commonly known as Foxconn, told investors this week that China ‘days like the world factory are done’, Bloomberg reported on Wednesday.
Liu said during Foxconn’s recent call that Trump’s trade war with Beijing forced electronic device makers to diversify their supply chains to other countries so they would not be hit with tariffs on Chinese products, according to Bloomberg.
Foxconn, the largest global maker of iPhones, aims to do the same. Liu told Bloomberg that 30% of the company’s production capacity is now outside China, a 20% increase from last June and that he is interested in expanding into a variety of regions.
“It does not matter if it is India, Southeast Asia, if it is the Americas, there will be a producing ecosystem in each,” Liu said, according to Bloomberg.
Trump has imposed expansive tariffs on goods imported from China as part of his years-long trade war against the country, but most evidence points to a net negative impact on U.S. businesses, individuals, and the overall economy.
An analysis by Bloomberg Economics previously estimated that the Trump administration’s sanctions by the end of 2020 would cost US $ 316 billion, and independent researchers from the New York Federal Reserve, Princeton, and Columbia estimate that the rates will cost Americans would cost about $ 831 per household over the course of 2019.
Tensions were temporarily de-escalated in December when Trump and China reached an interim trade deal, but a U.S.-China Business Council poll this week found that only 7% of companies saw the deal’s gains as heavier than the costs that were worth two years of rates.
Trump recently ruled tensions with China with two executive orders trying to ban viral video app TikTok and messaging app WeChat, which are owned by Chinese companies ByteDance and Tencent, respectively, operating in the US.
