Amid Escalating Trade Spat, Trump’s Trophy Deal Is Failing Its Economic Promise

President Donald Trump (L) and Terry Gou, chairman of Foxconn Technology Group, at the groundbreaking ceremony for Foxconns Milwaukee campus in June 2018.

President Donald Trump (L) and Terry Gou, chairman of Foxconn Technology Group, at the groundbreaking ceremony for Foxconn’s Milwaukee campus in June 2018. Scott Olson/Getty Images

Ten months ago, President Donald Trump welcomed Taiwanese tech tycoon, Terry Gou, in Milwaukee, Wisconsin for the groundbreaking of a 20 million-square-foot campus of Gou’s super-factory, Foxconn Technology Group, which assembles most of the world’s Apple products and other consumer electronics.

Trump hailed Foxconn’s arrival as a major milestone in his economic and trade agenda to bring overseas manufacturing jobs back to the U.S., as Foxconn promised to invest $10 billion in the massive Wisconsin facility and hire 13,000 factory workers locally.

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Nearly a year has passed. And so far, Foxconn’s promises are barely more tangible than that of a bad first date who promises to call you back. In reality, since the big groundbreaking ceremony with President Trump, Foxconn has quietly scaled back its project in Wisconsin, while Gou recently became awfully busy running for president in Taiwan.

Skeptics have questioned Foxconn’s sincerity, as well as the viability of its plan, from the beginning, simply citing America’s significantly higher labor cost than Foxconn’s 12 factories in mainland China, where most of its assembly lines are set up.

Their worries are becoming reality. By the end of 2018, Foxconn had invested only $99 million, or one percent of its committed investment, in Wisconsin and had hired just 200 in-state employees, according to a Wall Street Journal report last week.

Foxconn had originally planned for the Wisconsin facility to make LCD screens for TVs and computers. It later revised the project to make smaller screens and in January this year, scrapped the plan altogether by redesigning the campus to be an engineering and research lab, which will only hire about 1,000 people for non-manufacturing positions.

In the meantime, instead of moving manufacturing jobs back to the U.S., Foxconn has been shifting those jobs to India, where labor cost is even cheaper than China and trade risks with the U.S. are a nonissue. Last month, Gou said Foxconn will start mass-producing iPhones in India this year.

Also last month, Gou announced his bid for presidency in Taiwan’s 2020 election. His most recent meeting with Trump took place at the White House last Wednesday, where the two businessmen-turned-politicians reportedly discussed the job of being president.

As for the stagnated Milwaukee project, Gou reaffirmed Foxconn’s commitment to building a factory in the U.S. White House press secretary Sarah Sanders said Gou would announce even more investments in Wisconsin soon.

But Foxconn has yet to reveal the specific steps it plans to take on the factory ground. On April 23, Wisconsin Gov. Tony Evers said that Foxconn was seeking changes in its contract with Wisconsin and that he’d asked the company to provide details on the changes soon “so that we can all view this project with as much relevant information as possible.”

Amid Escalating Trade Spat, Trump’s Trophy Deal Is Failing Its Economic Promise