Trump's 'Make in America' Policy: China Opposes, Advises Foxxcon To Set Up Industrial Chain In Country

Chinese Premier Li Keqiang visited a Foxconn production center Tuesday and reportedly told the company’s CEO that they should set up its whole industrial chain in China rather than venturing further into countries such as the United States.

"We will continue to expand our development, and optimize the business environment. China has a huge market and lots of talent, it is the best investment place for expanding manufacturing,” Li is reported to have said during the visit.

Read: Apple iPhones Made In America Could Cost $100-200 More Than China-Made Devices: Analyst

Foxconn did not reveal much about the visit, but said in a statement to Reuters Wednesday that the company was “committed to investing” in China.

Li’s cozying up to Foxconn follows Foxconn Chairman Terry Gou’s visit to the U.S. in January, when he revealed that the company was considering investing $7 billion towards a U.S.-based display production plant. But, when Gou was asked last month about the plant, he said that he was feeling concerned about manufacturing displays in the U.S. due to the lack of government incentives, labor issues and supply chain hurdles. He did, however meet President Donald Trump towards the end of the month to discuss job creation and investment in the U.S.

Li’s visit comes at a time, when manufacturers are seeking alternative avenues for production, due to increased labor costs in the country. Foxconn has already set up a plant in India, where it makes phones for many brands.

Apple, whose iPhones are majorly manufactured by Foxconn, recently invested 1 billion in Japanese firm SoftBank’s $1 billion fund, aimed at creating 50,000 jobs in the U.S.

Trump has aggressively pursued his campaign promise to get companies to manufacture in the U.S. many companies, including Foxconn, have promised to invest in the country, but the focus has leaned towards high-tech jobs rather than supply chain or manufacturing jobs. His major focus has been Apple. He said in an interview in January, that Apple CEO Tim Cook had told him that the company had its “eyes open” to manufacturing in the U.S. The experts disagree that mass market products such as iPhones could be manufactured in the U.S. at competitive prices. According to Analyst Brian White, who heads the technology hardware and software department at Drexel Hamilton, a New York City institutional brokerage firm, even if Apple sets up the infrastructure to manufacture in the U.S., the iPhones made in the country will still end up costing at least $100-200 more.

Read: Will Apple Make iPhones In India?

Furthermore, shifting production out of China might not be easy, especially for tech companies such as Foxconn, since manufacturing a device such as an iPhone requires a cluster of suppliers at the same place along with the ease of importing material from abroad. The U.S. doesn’t have any such system in place at the current moment, nor has Trump revealed any plan for one. He had, however, said in his campaign speech that he might impose a 45 percent tariff on Chinese-made goods — a move he is yet to act on.