Taiwanese manufacturer Foxconn has appeared to back away from claims it is preparing to build a $7bn factory in the US.
News of the plant, which could create some 30,000 to 50,000 American manufacturing jobs, first surfaced last year after a meeting between now President Donald Trump and the Japanese billionaire Masayoshi Son, head of Japanese telecom and tech investment giant SoftBank.
“There is such a plan, but it is not a promise. It is a wish,” Foxconn’s chief executive officer, Terry Gou, told reporters on Sunday. Gou added that he wanted guarantees of inexpensive land and electricity before the company made its investment and warned against US protectionism, according to Reuters.
Trump promised to bring jobs to the US and repeatedly singled out Apple for its use of Chinese manufacturers – Foxconn among them – in stump speeches across the country during his campaign.
The US president has taken an aggressive stance toward China, saying the country has “stolen” American jobs. He has repeatedly threatened to impose tariffs on goods imported from the country.
But Foxconn’s Chinese holdings are vital to its interest. The company is one of Apple’s largest suppliers and China is now Apple’s largest iPhone market. Gou, the company chairman often referred to in the press as “Taiwan’s Donald Trump”, is likely to run for president of Taiwan in 2020, according to multiple reports. The executive ardently favors unifying China and Taiwan, which would further his own business interests – Foxconn owns manufacturing facilities, which have been heavily criticized for their harsh working conditions, in the city of Shenzhen in China’s Guangdong province.
Negotiations with the Taiwanese electronics manufacturer are likely to be complicated not only because of the diversity of Foxconn’s holdings but also because of Trump’s decision to scrap the complex Trans-Pacific Partnership (TPP) trade agreement with Vietnam, Japan and others – but not China – by executive order on Monday
The decision has made China itself the leading international trade advocate in the Asia-Pacific region; President Xi Jinping told attendees at the Davos world economic forum that China would pursue “regional” agreements in stark contrast to the Trump administration’s commitment to negotiating only with individual nations.
In March 2016, Foxconn finalized its acquisition of Japanese electronics giant Sharp; the subsidiary company is said to be contracted to manufacture the high-resolution OLED screens planned for the iPhone 8. The US facility would also be run by Sharp, were it ever to take shape.
This is not the first time Gou has said he wanted to build a facility in the US. In 2013, Foxconn promised to invest “over $30m to build a high-tech manufacturing facility” in Harrisburg, Pennsylvania, according to a Bloomberg report. The plant never materialized.
Gou’s current “wish” clarifies a promise of investment made from Trump’s side by Softbank’s Son, who is also chairman of US telecoms company Sprint. Son met Trump in December and said amid much fanfare that he would commit $50bn to investment in US startups and create tens of thousands of jobs.
Much of that financial commitment turned out to be from Saudi Arabian sovereign wealth, but Son showed reporters a page with the Foxconn logo on it promising an additional $7bn over four years – in Sunday’s interview, Gou said the page was apparently a reference to a conversation with Son. “I thought it was a private conversation, but then the next morning it was exposed,” Gou said in the Reuters report.