TAIPEI (Reuters) – The head of Foxconn, the world’s largest contract manufacturer of electronic goods and a major Apple Inc supplier, said on Sunday that the rise of protectionism is unavoidable, as the company considers investing $7 billion in a display-making plant in the US.
Terry Gou, chairman of Foxconn, formally known as Hon Hai Precision Industry Co, warned that uncertainties for this year make it tough to have a very clear analysis and outlook, but he said it was clear politics would underpin economic development.
His remarks came after US President Donald Trump pledged to put ‘America First’ in his inauguration speech Friday, reinforcing concerns of a US protectionist agenda that has cast a cloud over the outlook on global trade.
“The rise of protectionism is unavoidable,” Gou said. “Secondly, the trend of politics serving the economy is clearly defined.”
Gou, who did not directly refer to Trump, gave his remarks in a speech to an audience of employees and senior company executives at an annual company event on Sunday.
Taiwan’s tech-dominated manufacturers are nervous about potential US trade policies because Trump has threatened to raise tariffs on imports from some countries, notably China.
Foxconn is one of the biggest employers in China where it operates factories that churn out most of Apple’s iconic iPhones.
Also on Sunday, Gou said Foxconn is considering setting up a display-making plant in the United States in an investment that would exceed $7 billion.
Foxconn’s proposal to build a display plant, which would be planned with its Sharp Corp unit, depend on many factors, such as investment conditions, that would have to be negotiated at the US state and federal levels, Gou told reporters.
Gou said that Foxconn had been considering such a move for years, but the issue came up when Foxconn business partner Masayoshi Son, head of Japan’s SoftBank Group, talked to Gou before a December meeting Son had with Trump.
As a result of the meeting, Son pledged $50 billion of investment in the United States and inadvertently disclosed information showing Foxconn’s logo and an unspecified additional $7 billion investment. At the time, Foxconn issued a brief statement saying it was in preliminary discussions to expand its US operations, without elaborating.
“Son is a good friend,” Gou said, adding that Son had asked for his views about investing in the United States.
Gou said he told Son that the US has no panel-making industry but it is the second-largest market for televisions. An investment for a display plant would exceed $7 billion and could create about 30,000-50,000 jobs, Gou told Son.
“I thought it was a private conversation, but then the next morning it was exposed,” Gou said. “There is such a plan, but it is not a promise. It is a wish.”
Foxconn has existing cooperation and operations in Pennsylvania, which is a state Foxconn would prioritize, depending on land, water, power, infrastructure and other investment conditions, he said.
Gou added that Foxconn would also remain active in in China, dispelling talk that Beijing may be pressuring Foxconn about its investments.
(Reporting by J.R. Wu; Editing by Christian Schmollinger, Mark Potter and David Goodman)