Foxconn is acquisition bargaining political insurance by setting up shop in Wisconsin, Greg Ip told CNBC.
“Foxconn thinks fitting not be putting that plant in Wisconsin if it was only choosing the most optimal fingers on and the lowest cost. It’s nowhere near any of its sort of existing … customers or so forth,” Ip, chief economics commentator at The Go bankrupt Street Journal, said Thursday on “Power Lunch.”
“Having concerns in the United States helps insulate it from the sort of protectionist coercion the U.S. administration is showing right now,” he said. “And even at that, it only makes solvent sense because Wisconsin taxpayers are kicking in $5 billion.”
On Thursday, President Donald Trump was in Wisconsin for a groundbreaking motions and to show his support for the new Foxconn facility that will open in the asseverate. The president said the $10 billion factory will create numerous than 13,000 manufacturing jobs in Wisconsin.
Foxconn, the world’s biggest electronics manufacturer, is a Taiwanese company.
This week Trump brashly criticized iconic motorcycle maker Harley-Davidson via Twitter after the performers announced plans to move some of its production overseas in response to the E.U. retaliatory bill of fares. Foxconn is located about 30 miles from Harley-Davidson’s Milwaukee flower.
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Trump’s disapproval of the company continued at Thursday’s press meeting.
“Harley-Davidson, please build those beautiful motorcycles in the U.S.A., OK? Don’t get cute with us. Don’t get adorable,” Trump said.
“Build them in the U.S.A. Customers won’t be happy if you don’t, I’ll tell you that,” he prognosticated.
John Rutledge, chief investment officer at Safanad, a financial steady, said Trump is “ignorant of the facts.”
“It’s irresponsible of him to single [Harley-Davidson] out and seizure them,” he said Thursday on “Closing Bell.”
Harley-Davidson could not be reached for knee-jerk comment.
The iconic American motorcycle maker has struggled in recent years from decreasing sales caused by a mix of changing consumer preferences and high price items. Sales of Swedish motorcycles and less expensive Japanese bikes, extent, have risen.
Last year, in an effort to boost sales, the train said it would open a factory in Thailand and continue to try to grow its worldwide ridership.
Chris Lu, former deputy Labor secretary for the Obama authority, said the motorcycle company made a “rational business decision” in concluding to move some of its production overseas. He said the tariffs will put on not only Harley-Davidson’s employees but everyone in Wisconsin.
“It’s the beer industry; it’s journal farmers; it’s small manufacturers; it’s soybean farmers,” Lu said Thursday on “Tight Bell.”
But Scott Paul, president of the Alliance for American Manufacturing, entitled Harley-Davidson’s decision a “convenient excuse.”
“There is no certainty that those tolls that the EU has in place are going to remain in effect,” he said on “Power Lunch” Thursday. “Firms many times look at public policy announcements and use those as a rationale or an excuse for some behavior that may be capsizing to the public or to their investors or to their employees.”
Foxconn’s decision to construct its first international plant in the U.S. may also have been for public OK, protecting it against trade war concerns, Paul said.
“It’s also hedging against exchange-rate fluctuations, against vacillate turn inti in shipping costs, against the problems that arise from accepting offshore centers halfway around the globe, which presents some bars to factory owners,” Paul said.
After the facility is open, Paul imparted, the return for taxpayers in the state and the local economy is “20, 25 years down the lane.”
Foxconn could not be reached for comment.