Executive Briefings

Politics Drive Foxconn's U.S. Manufacturing Aspirations

Foxconn Technology Group's plan to invest $7bn in U.S. manufacturing has touched off a scramble among three heartland states. At stake are not only jobs - but votes as well.

A month after Donald Trump was elected president, Taiwan-based Foxconn was one of the first companies to announce plans to invest billions to help create jobs. Michigan, Wisconsin and Ohio are fighting to secure the factory, according to people familiar with the process. The logic behind those sites has as much to do with political imperatives as it does business.

“If you look at the Foxconn plan and the states that they’re considering, it didn’t surprise me that so many of them happen to be swing states,” Caroline Freund, an economist at the Peterson Institute for International Economics in Washington, said in this week’s episode of the Decrypted podcast.

Politics has always been a core consideration for the new factory, one of the people with knowledge of the discussions said. Trump won slender victories in Wisconsin and Michigan, while Ohio has long been a bellwether electoral state. Bringing thousands of jobs to those states might help any 2020 re-election campaign.

During last year’s contest, Trump pledged to force companies to build their products in the U.S., raising speculation he might impose import tariffs on products such as iPhones. That heightened the risk of a trade war with China, where U.S. tech companies in particular contract out their assembly.

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A month after Donald Trump was elected president, Taiwan-based Foxconn was one of the first companies to announce plans to invest billions to help create jobs. Michigan, Wisconsin and Ohio are fighting to secure the factory, according to people familiar with the process. The logic behind those sites has as much to do with political imperatives as it does business.

“If you look at the Foxconn plan and the states that they’re considering, it didn’t surprise me that so many of them happen to be swing states,” Caroline Freund, an economist at the Peterson Institute for International Economics in Washington, said in this week’s episode of the Decrypted podcast.

Politics has always been a core consideration for the new factory, one of the people with knowledge of the discussions said. Trump won slender victories in Wisconsin and Michigan, while Ohio has long been a bellwether electoral state. Bringing thousands of jobs to those states might help any 2020 re-election campaign.

During last year’s contest, Trump pledged to force companies to build their products in the U.S., raising speculation he might impose import tariffs on products such as iPhones. That heightened the risk of a trade war with China, where U.S. tech companies in particular contract out their assembly.

Read Full Article