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Apple May Skirt IPhone Tariffs As Foxconn Comes to the U.S.

Apple Inc. likes to say it supports two million U.S. jobs. Plans by the company's main manufacturing partner for a $10bn factory in Wisconsin will add at least 10,000 more, helping Apple fend off the threat of import tariffs on its most important product, the iPhone.

Apple May Skirt IPhone Tariffs As Foxconn Comes to the U.S.

President Donald Trump and Foxconn Technology Group Chairman Terry Gou said in a White House press conference on July 26 that the factory will initially employ about 3,000 people, before expanding to as many as 13,000. It's being built in House Speaker Paul Ryan's home electoral district.

The factory will make LCD display panels for televisions and computer screens that are unlikely to carry the Apple logo. However, the investment may discourage lawmakers from introducing import taxes on products Foxconn does make for Apple, such as the iPhone, which are harder to assemble in the U.S.

“Foxconn is doing its best to try to head off a trade war and they’re obviously being quite strategic in terms of making their investment in house speaker Ryan’s home district and thereby trying to gain goodwill,” said Mark Wu, an assistant professor at Harvard Law School who serves on the World Economic Forum’s Global Future Council on Trade and Foreign Direct Investment. “If the administration did decide they wanted to target something, Foxconn could say ‘Go after someone else’s products rather than ours because we’re helping you’.”

Trump targeted Apple during his election campaign, promising to force the Cupertino, California-based company to bring more factory jobs to the U.S. The rhetoric prompted fears of a trade war with China, where contract manufacturers such as Foxconn, Pegatron Corp. and Quanta Computer Inc. assemble gadgets designed by U.S. tech companies.

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President Donald Trump and Foxconn Technology Group Chairman Terry Gou said in a White House press conference on July 26 that the factory will initially employ about 3,000 people, before expanding to as many as 13,000. It's being built in House Speaker Paul Ryan's home electoral district.

The factory will make LCD display panels for televisions and computer screens that are unlikely to carry the Apple logo. However, the investment may discourage lawmakers from introducing import taxes on products Foxconn does make for Apple, such as the iPhone, which are harder to assemble in the U.S.

“Foxconn is doing its best to try to head off a trade war and they’re obviously being quite strategic in terms of making their investment in house speaker Ryan’s home district and thereby trying to gain goodwill,” said Mark Wu, an assistant professor at Harvard Law School who serves on the World Economic Forum’s Global Future Council on Trade and Foreign Direct Investment. “If the administration did decide they wanted to target something, Foxconn could say ‘Go after someone else’s products rather than ours because we’re helping you’.”

Trump targeted Apple during his election campaign, promising to force the Cupertino, California-based company to bring more factory jobs to the U.S. The rhetoric prompted fears of a trade war with China, where contract manufacturers such as Foxconn, Pegatron Corp. and Quanta Computer Inc. assemble gadgets designed by U.S. tech companies.

Read Full Article

Apple May Skirt IPhone Tariffs As Foxconn Comes to the U.S.