Foxconn Faces Tariff Blow--Will It Move More Production Overseas?

GuruFocus.com
02-12

Feb 11 - Foxconn Technology (FXCOF, Financial) Chairman Young Liu says the Taiwan-based manufacturer is adjusting its production plans to address new U.S. tariff challenges, Reuters reports. Speaking at the company's headquarters in New Taipei, Liu explains that Foxconn, which operates facilities in the U.S. and likely in Mexico, tailors its production capacity in response to evolving tariff measures. Following President Donald Trump's recent announcementand subsequent pause until March 4of a 25% tariff on imports from Mexico and Canada, Foxconn is preparing to coordinate with its domestic partners to meet the administration's preference for U.S.-based production.

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Liu notes that if manufacturing in the U.S. becomes less feasible, the company can shift operations overseas, thereby mitigating the potential adverse effects. However, he cautions that such tariffs may have a negative impact on the global economy by shrinking markets. Earlier this week, the companyknown as Hon Hai Precision and a key supplier for Apple (AAPL, Financial)reported a 3.16% rise in January revenue, and it expects strong first-quarter growth. Nvidia (NVDA, Financial) remains among its prominent customers. Foxconn has not immediately responded to additional inquiries, leaving analysts to evaluate the broader macroeconomic implications of these trade policies. Market analysts remain cautious as policy uncertainty persists globally.

This article first appeared on GuruFocus.

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