Foxconn Founder Pushes Apple to Invest Outside of China

Apple's manufacturing decisions could get even more political soon. Foxconn founder Terry Gou, who is planning to run for president in Taiwan in 2020, today said that he "will plead to Apple to come to Taiwan" and that he "believe[s] it is possible" for the company to move its production from China, Bloomberg reported. 

Gou's special assistant later told Bloomberg that he was merely saying that he wants Apple to "invest" in Taiwan, not that he wants the company to leave China. But the circumstances surrounding the speech make us skeptical. Foxconn said on June 11 that it could make all of Apple's hardware outside China, and Nikkei Asian Review reported on June 19 that Apple was thinking of moving at least some of its production elsewhere.

Apple's motivation for shifting production to other countries was partly attributed to China's falling birth rate and increasing wages. It also stems from U.S. tariffs on goods imported from China, which means that unless companies start manufacturing their products in other countries, they'll have to choose between reducing their margins or increasing their prices (at least on units intended for sale in the U.S.). Some companies would rather move.

Right now there's a fair amount of back-and-forth regarding Apple's plans. The company hasn't commented on Nikkei's report, but several of its manufacturing partners have "pushed back against that idea," according to Bloomberg. Foxconn itself said that Apple hadn't asked it to move production from China. It's unclear how much of that is damage control--companies obviously have to be careful during a trade war--and how much is accurate.

Apple's public opposition to U.S. tariffs is more clear. The company filed a public comment on June 20 saying that it expected the increasing tariffs to affect all of its business, from Mac and iOS devices to their corresponding accessories, without directly impacting many Chinese companies. It also not-so-subtly reminded the U.S. that it's the largest corporate taxpayer and hurting its business would also hurt its "economic contribution" to the country.

Tensions between the U.S. and China seem unlikely to relax any time soon. Earlier today, the U.S. Department of Commerce added AMD's THATIC Joint Venture to the Entity List that Huawei joined in May. The U.S. blacklisting another Chinese business probably doesn't bode well for the countries' relationship. Now the question is if Gou will be the only political hopeful looking to benefit from that spat or if those in other countries will do the same.