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The New York Times (may be pay-walled) reports that Terry Gou, the CEO of Foxconn has confirmed rumours aired in December to the effect that the company is considering building an additional factory in the United States. Yahoo Finance UK says that the factory, if built, "could create about 30,000-50,000 jobs." The South China Morning Post reports that the facility, expected to cost more than $7 billion, would make dot-matrix displays (such as used in television sets and mobile phones) under the Sharp name. Mr. Gou remarked that:
While it is difficult to have a clear analysis of the economic outlook for this year, due to looming uncertainties, three factors can be seen as clues. First, the rise of protectionism is inevitable. Secondly, the trend of politics serving the economy is clearly defined, and thirdly, the proportion of real economy is getting increasingly bigger.
Speaking in November, Gou had called on the incoming U.S. leaders to refrain from protectionist policies, The China Post had reported.
Additional coverage:
Related:
Foxconn Plans to Replace Nearly All Human Workers With Robots in Some Factories
Foxconn Acquires Sharp at a Lower Price Than Previously Agreed
Sharp Accepts $6.25 Billion Takeover Bid from Foxconn, but Foxconn is Wary of Debt
Softbank to Invest $50 Billion in the US
(Score: 0) by Anonymous Coward on Wednesday January 25 2017, @02:02AM
Europe has a 20% or so VAT while the US has 6% or so sales tax. Doesn't this put US exporters at a disadvantage?
Example: GM builds a car for 20,000 in the US and sells it in the EU for 25,000 which leaves 1,000 profit after VAT.
BMW builds a car for 20,000 is Germany and sells it for 25,000 in the US which leaves 3,500 profit after sales tax.
So BMW profits a lot more than GM for doing basically the same thing and has a big incentive to export while GM might not bother for a measly 1,000. Yes, I've seen the argument that we should compare GM sales in the EU to BMW sales in the EU, and separately BMW sales in the US to GM sales in the US. Those cases do seem fair, but having a high sales tax / VAT amounts to a big incentive for exports.
(Score: 0) by Anonymous Coward on Wednesday January 25 2017, @04:12AM
It's more probable that both brands sell the cars cheaper in USA, or more expensive in EU. Many EU countries also have extra taxes for cars. Both brands manufacture all over the world, so sooner or later they have to import/export anyway (BMW X5 is USA made, IIRC, so any X5 in EU is imported; GM has Opel/Vauxhall in EU).
But if you selected other product where only VAT/sales tax mattered, it would be pretty much that: USA price < EU price (in same currency). Sometimes even beyond what taxes contribute to the sticker price (Rip Off Britain, same prices all over EU even when local income is crappier for a big zone of EU, etc). Also small companies don't handle the paperwork, so they also apply VAT to exports (stupid, but they do it so no real incentive for foreign buyers, even worse as the tax is higher, the shipping insurance will be higher, and tariffs go on top of the VAT... all meaning EU exports could be better).
(Score: 0) by Anonymous Coward on Wednesday January 25 2017, @08:13AM
In the US sales tax is not collected on components that are destined for resale. So all the raw materialss and parts that go in one end of the factory and come out the other as an assembled vehicle are untaxed. But in Europe VAT would still be collected on them. So cost of manufacturing in europe is higher.
(Score: 1) by shrewdsheep on Wednesday January 25 2017, @10:16AM
This statement is somewhat misleading. Every resale indeed contains VAT but the VAT due to the tax collector is the difference of the VAT for the sale minus the VAT paid for parts/services upstream (bought to make the product/service sold). This way the VAT collected in the end exactly equals the VAT of the final product (what seems to be paid by the vendor of a consumer product in the US) but it is distributed over the production chain proportionally to the earnings of every step. This strikes me both as a more logical and fair solution as compared to what is seemingly implemented in the US.
(Score: 2) by FatPhil on Wednesday January 25 2017, @03:49PM
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves