A satirical Bloomberg column imagines how Foxconn’s chairman Terry Gou might respond to Trump’s plan to force Apple to make its products in America.
The piece suggests that when other countries like Brazil and Indonesia have required Apple to make its products within the country in order to avoid import tariffs, the actual changes were minimal.
When Apple told me to start making iPhones in Brazil to get around import tariffs, I made it happen. It didn’t create much employment, mind you, because I just exported pre-fabricated iPhones for the locals to slot together — kind of like Lego — but it got the job done. And by job, I mean kept Apple’s and Brazil’s leaders happy.
The satirical version of Gou says that Foxconn could do the same in the USA too, but it wouldn’t create many jobs.
Heck, I can set up a production line in Trump Towers if you like, but the costs will be yuuuge. I have to cover my expenses, which include factories, labor and transport. You see, I don’t manufacture in China just because it’s cheaper, but because thousands of suppliers are there, within spitting distance of my factories and the one million people I employ during peak season. I can deploy more robots in the U.S., sure.
In what is probably closer to the truth than anyone would like to admit, the fake Gou tells Trump what to do to make it happen.
Give me tax breaks, subsidies to hire workers, cheap electricity and free land, and I’m sure we can come to some arrangement.
A news report yesterday suggested that Foxconn may be talking of making a $7B investment in U.S. facilities and creating 50,000 new jobs. The company responded by saying that it was in talks with U.S. officials but could not comment on the details of any plans.
In separate Trump-related news, Moody’s today said the president-elect’s plan to allow companies to repatriate overseas cash at a lower tax rate would have a positive short-term impact, but deeper tax reform would be needed to see long-term results.