Foxconn Cuts US Investment Promised to Trump by 90%, Down to 1.1 Trillion Won

▲Former U.S. President Donald Trump and Terry Gou (right), founder of Foxconn [Image source=AP News]

[Asia Economy Reporter Kwon Jae-hee] Taiwan's Foxconn, the world's largest contract manufacturer, has drastically reduced its promised investment of $10 billion (about 11 trillion KRW) to former U.S. President Donald Trump to about one-tenth of the original amount.

According to the Nihon Keizai Shimbun on the 21st, Foxconn has cut the investment for its first U.S.-based liquid crystal display (LCD) panel manufacturing plant, to be built in southeastern Wisconsin, from the original $10 billion to $672 million, and the planned employment from about 13,000 to 1,454.

On the same day, Wisconsin Governor Tony Evers announced this information in a statement.

Previously, in July 2017 during President Trump's administration, Foxconn founder Terry Gou was invited to the White House and promised this $10 billion investment plan.

In response, Wisconsin also agreed to provide tax incentives worth $2.85 billion. However, due to the significant shortfall from the initially planned investment scale, Wisconsin announced it would reduce the tax incentives provided to Foxconn to $80 million.

Foxconn stated, "There were unexpected market fluctuations during the 2017 negotiations," and added, "We will make the Wisconsin plant a data infrastructure hardware manufacturing complex." However, they did not specify what type of factory would be built.

It is also known that political reasons played a role in the significant revision of Foxconn's original plan. Wisconsin is part of the 'Rust Belt,' a region with many white working-class voters traditionally considered a Democratic stronghold. However, in the 2016 U.S. presidential election, Trump narrowly won this area, making it a key battleground. For President Trump, who was seeking re-election in 2020, securing votes required incentives, which led to attracting Foxconn's investment.

However, the Nihon Keizai Shimbun interpreted that Foxconn's investment plan was canceled after President Trump lost the November 2020 election.