The CEO of the largest iPhone manufacturer reportedly predicted that China would no longer be the 'world's factory' due to Trump's trade war 6park.com
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Tyler Sonnemaker  6park.com
Aug 13, 2020, 2:41 AM 6park.com
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President Donald Trump on November 9 in Beijing. Thomas Peter-Pool/Getty Images
Foxconn Chairman Young Liu said Trump's trade war against China meant its "days as the world's factory are done," Bloomberg reported Wednesday.Foxconn, the largest iPhone maker, said it planned to diversify production lines to avoid tariffs the Trump administration has imposed on Chinese-made goods, according to Bloomberg.Liu told Bloomberg that the company was looking to a variety of regions including India, Southeast Asia, and the Americas.Trump has waged a yearslong economic battle against China, imposing extensive tariffs and targeting a variety of Chinese companies, though evidence strongly suggests that most of the burden has fallen on Americans.Visit Business Insider's homepage for more stories. 6park.com
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Over the past 50 years, China has become a global economic powerhouse, largely because of the rise of its manufacturing industry. But the CEO of one of the largest companies in that space, Hon Hai Precision Industry Co., predicted that era could be coming to an end.
Young Liu, the chairman of Hon Hai, which is more commonly known as Foxconn, told investors this week that China's "days as the world's factory are done," Bloomberg reported Wednesday.
Liu said during Foxconn's latest earnings call that Trump's trade war with Beijing has forced electronic-device makers to diversify their supply chains to other countries so they don't get hit with tariffs on Chinese-made products, according to Bloomberg.
Foxconn, the largest manufacturer of iPhones, plans to do the same. Liu told Bloomberg 30% of the company's production capacity is now outside China, a 20% increase from the previous June, and that it was interested in expanding in a variety of regions. 6park.com
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"No matter if it's India, Southeast Asia, or the Americas, there will be a manufacturing ecosystem in each," Liu said, according to Bloomberg.
Trump has imposed expansive tariffs on goods imported from China as part of his yearslong trade war against the country, but most evidence points to a net negative effect for US companies, people, and the overall economy.
An analysis from Bloomberg Economics previously estimated the Trump administration's punitive measures would end up costing the US $316 billion by the end of 2020, and independent researchers from the New York Federal Reserve, Princeton, and Columbia estimated that the tariffs would cost Americans about $831 per household over the course of 2019.
Tensions temporarily deescalated in December when Trump and China reached an interim trade deal, but a survey from the US-China Business Council this week found that only 7% of businesses viewed the gains from the deal as outweighing the costs incurred by two years' worth of tariffs. 6park.com
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Trump recently reignited tensions with China with two executive orders seeking to ban the short-form-video app TikTok and the messaging app WeChat, which are owned by the Chinese firms ByteDance and Tencent, respectively, from operating within the US. 6park.com