Electronics manufacturer Hon Hai Precision, aka Foxconn, is “has become unable to manufacture some equipment on the mainland” of China due to U.S. tariffs, Chairman Terry Guo has stated according to Nikkei. The firm is therefore moving some of its telecoms equipment and server manufacturing to Taiwan from mainland China.
While most of Foxconn’s telecoms production involves phones, it also ships heavier items by sea to the U.S. Panjiva data shows China accounted for 80.0% of Foxconn’s U.S.-bound seaborne shipments in the 12 months to Apr. 30.
That was lead by computer components which accounted for 26.6% of all imports. U.S. imports of such components by all manufacturers have been crushed by tariffs of 25% since July 2018, as outlined in Panjiva’s May 9 research.
So far shipments from Taiwan, which accounted for 9.3% of the total, have been largely accounted for by computer monitors.
Source: Panjiva
Foxconn’s U.S. seaborne imports of telecoms equipment, mostly routers, have refocused entirely on China in the past year having previously included Vietnam.
The 10% tariff rate does not appear to have been a hurdle, and indeed its imports of such equipment have surged 7.6-fold in the three months to Apr. 30 compared to a year earlier. The increase in tariffs to 25% from 10% as from May 10 make a move to another manufacturing location even more inevitable.
Source: Panjiva