The CEO of the largest iPhone manufacturer reportedly predicted that China will no longer be the 'world's factory' due to Trump's trade war (FB, TWTR, GOOG, GOOGL)
Foxconn chairman Young Liu said Trump's trade war against China means its "days as the world's factory are done," Bloomberg reported Wednesday. Foxconn, the largest iPhone maker globally, said it plans 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 is looking to a variety of regions including India, Southeast Asia, and the Americas. Trump has waged a years-long economic battle against China, imposing extensive tariffs and targeting a range of Chinese companies, though evidence strongly suggests that most of the burden has fallen on Americans. Visit Business Insider's homepage for more stories.
Over the past 50 years, China has become a global economic powerhouse, due in large part to 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, 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 global manufacturer of iPhones, plans to do the same. Liu told Bloomberg that 30% of the company's production capacity is now outside China, a 20% increase from the previous June and that it's interested in expanding in a variety of regions. "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 years-long trade war against the country, but most evidence points to a net negative impact for US companies, individuals, and the overall economy. An analysis from Bloomberg Economics previously estimated that the Trump administration's punitive measures will 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 roughly $831 per household over the course of 2019. Tensions temporarily deescalated last 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. Trump recently reignited tensions with China with two executive orders seeking to ban viral video app TikTok and messaging app WeChat, which are owned by Chinese-firms ByteDance and Tencent, respectively, from operating within the US.Join the conversation about this story » NOW WATCH: Why Pikes Peak is the most dangerous racetrack in America
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