Monday, February 11, 2019

Foxconn a Trump ploy in Trade War, playing Wisconsin GOP hucksters as hicks!

The Foxconn "con" has been snaking its way to Wisconsin for a few years, and with a closer look at past comments made back in 2017, it's much easier to see the relationship between Trump's poisonous trade war and China's attempt to hold onto market share and intellectual property. 

We were warned just a few days ago what it all really meant, after Foxconn's CEO Terry Gou proclaimed after talks with Trump that Wisconsin's plant is still going forward:
Gou's candor supports a view among trade analysts that Foxconn's promise to build a flat-screen manufacturing complex in Wisconsin amounts to a bargaining chip in an economic conflict waged between Washington and Beijing — a politically sensitive trade war with hundreds of thousands of American jobs at stake...
“If you think foreign investment is one of the moving pieces (in the trade talks), it absolutely is," said Mary Lovely, an economist who specializes in international trade and investment at the Peterson Institute for International Economics in Washington, D.C. "It’s pawns on the chess board."
The implied bargain is clear: Foxconn will keep alive its Wisconsin investment as long as Trump ensures Foxconn continues to have wide-open access to American consumers for its Chinese-made imports — and as long as Wisconsin taxpayers subsidize the project with the most expensive package of subsidies ever from a U.S. state to a foreign company.
Add to that Trump's U.S. ban on Huawei products over concerns China's government is using tech to spy, all the while Gou is assembling Apple phones in China and developing tech at the UW despite his incredibly close ties to China's government. What's going on?

Gou/Crooked Trump connection Suspicious: Here's a bullet point list of Gou's comments that tell the story with my own highlighted points of interest. From Asia/Nikkei: March 02, 2017:  
1. Gou ... has begun to work on a new panel facility in southern China ... hinted that plans to invest in the U.S. may not materialize any time soon due to labor issues and a lack of incentives.

2. The new complex could eventually create as many as 15,000 engineering jobs. The new Zengcheng campus will house an advanced 10.5-generation panel facility. Corning (which declined to build a plant in Wisconsin) and Cisco, two major U.S. companies, will also invest in the new tech. park. Foxconn's current China expansion efforts include plans to recruit some 12,000 college graduates in the country in 2017.

3. There are concerns that large-sized panels are not a wise investment. David Hsieh, a senior director at research company IHS Markit, said that Foxconn will be fighting an uphill battle in the large TV market in China. "There will be the issue of oversupply, so the key factor to Foxconn's success is whether it can manage to sell all its large panels via [Foxconn-controlled] Sharp, otherwise if they still need to sell extra panels to other brands, that would create extra competition for themselves."

4. The key Apple assembler's move to grow its China operations comes amid mounting trade tensions between Washington and Beijing ... Trump has also frequently targeted Apple, which accounts for over 50% of Foxconn's total revenue, in his attack against American companies he thought to have caused domestic job losses by outsourcing manufacturing abroad. 
Trump's Connection? Yes, and how Gou played Wisconsin's GOP hicks. 5 months after this article, a rushed Wisconsin deal emerged:
5. Responding to Trump's protectionist approach, Gou said in January that he was considering building a "highly automated" facility to make large-sized panels in the U.S..

6. Gou told reporters that he had returned earlier this week after a short trip to Washington ... raised uncertainties ... saying he was not sure whether American officials could be efficient in tackling investment challenges and regulations to attract foreign investors. "I am concerned as to whether the U.S. can resolve all the investment issues in only a few months' time," Gou said, adding America also still lacks skilled labor and a comprehensive supply chain for the display industry. Does the U.S. offer incentive programs for foreign investors?"

7. Gou has close ties to the Chinese Politburo.
Double Standard Exposed: Finally, I can't help but wonder what Republicans would be screaming at Obama if he had created this massive global uncertainty with tariffs and subsequent job losses. The political tolerance for all of this is astonishing. Remember when one single Obama regulation was enough to collapse markets and destroy jobs? Seriously: 
The scope and abruptness of Trump's trade barriers are unprecedented in the global age ... targeting all the world's biggest trading blocs and economies, including all of North America; the 28-nation European Union; Japan, Russia and India.

China, the E.U., Canada, Mexico, India, Turkey and Russia retaliated with trade barriers of their own, all squarely aimed at the U.S. The world looked on last year as one market after another began to shut out imports. Trade slowed and global economic uncertainty grew. American manufacturers from Harley-Davidson to General Motors cried out in protest, blaming the trade war for killing American jobs.

The trade war also set off alarms at Foxconn. "The people in Wisconsin have a lot at stake," said Philip Levy, who served as senior foreign trade adviser to President George W. Bush and is now a senior fellow on the global economy at the Chicago Council on Global Affairs. "But the forces that are buffeting Foxconn are hitting a lot of American manufacturing right now with changing costs, changing markets and a lot of new uncertainty."

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