Foxconn expects its global footprint to mitigate Trump’s tariffs – report
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BING-JHEN HONG
Foxconn Technology (OTCPK:FXCOF) said it expects a relatively low impact from potential new tariffs from U.S. President-elect Donald Trump due to the company’s global manufacturing footprint, Reuters reported.
Chairman of Foxconn — also known as Hon Hai Precision (OTCPK:HNHAF) (OTCPK:HNHPF) — Young Liu told reporters after a forum in Taipei that the company saw the main impact of any new tariffs falling on its clients because its business model was based on contract manufacturing, the report added.
“Clients may decide to shift production locations, but looking at Foxconn’s global footprint, we are ahead. As a result, the impact on us is likely smaller compared to our competitors,” said Liu.
Earlier this week, Trump said that he would levy a 25% tariff on all products from Mexico and Canada and an additional 10% tariff on products from China.
Foxconn has large manufacturing facilities in China, including a massive Apple’s (AAPL) iPhone assembly plant. But the company has been making investments in other countries such as the U.S., Mexico, and Vietnam as part of its efforts to diversify its supply chain. In Mexico, the company is building a large manufacturing facility to make Nvidia’s (NVDA), GB200 AI servers.
Liu noted that Foxconn would be able to share more information about the company’s U.S. plans only after Jan. 20, when Trump takes office and the policies and tariff changes become clear. “After that, we will have a corresponding strategy in place,” Liu added.
During Trump’s first term between 2017-2021, Foxconn announced a $10B investment in Wisconsin that the company later mostly abandoned. On Tuesday, Foxconn said a unit bought land and factory buildings for $33M in Harris County, Texas, according to the report.
Liu said Foxconn will continue to invest in Mexico as the company believes the trend was moving towards local manufacturing. Mexico, with over 100 million people and its nearness to the South American market, presented a vital opportunity, Liu added, as per the report.