Rumors surfaced over the weekend that Foxconn – the Taiwanese company Apple contracts with to help assemble its iPhones – is planning a second multibillion-dollar factory in the U.S., just weeks after it said a separate facility is on the way in Wisconsin.
Should the plant eventually elicit a formal announcement, it will be heralded by many as a win for President Donald Trump. But it will also underscore that the White House's "America First" and "Buy American, Hire American" mantras are dependent in part on courting investors outside of the U.S., as are Trump's ambitious agendas for job creation and economic growth.
Details of the second Foxconn facility are scarce to this point. The plant is expected to be located in Michigan and involved in autonomous-vehicle research and development, but exactly how much Foxconn plans to invest – and how many American workers the plant will employ – aren't public knowledge yet.
If it's anything like the Wisconsin factory, however, it's likely to bring with it thousands of jobs. That facility is expected to initially employ 3,000 workers but could create as many as 13,000 local jobs in the years ahead. Ancillary construction and maintenance positions are also expected to be in demand as the plant gets off the ground
his is a great day for American workers and manufacturing, and for everyone who believes in the concept and the label 'Made in the USA,'" Trump said last month at a White House event announcing the investment.
But the concept of "Made in the USA" is complicated by globalized supply chains and the fact that plenty of international companies have set up shop in America to produce their goods in one of the largest consumer marketplaces on the planet.
Looking at the auto manufacturing industry, for example, companies like Toyota are headquartered abroad but produce vehicles in the U.S., and arguably make more "American" vehicles than even domestic companies.
The 2016 iteration of the Cars.com American-Made Index – which graded popular car models in the U.S. on the degree to which their parts and assembly are sourced here – featured three Honda models and two Toyota models in its top five. Absent were autos from American companies like Ford and General Motors.
This year, Cars.com ended up changing its methodology amid a struggle to reasonably describe vehicles as American-made, saying in a statement that "the number of models meeting our original criteria has fallen due to the globalization of automobile manufacturing."
The results of the outfit's 2018 index, meanwhile, could depend in part on what the Trump administration works out with Canada and Mexico – two foreign countries integrated into the U.S. auto supply chain and part of the to-be-renegotiated North American Free Trade Agreement.
To be sure, Trump hasn't expressed a desire to solely promote American companies. He has repeatedly tweeted about courting international investment during his first six months in the White House, and has previously appeared to threaten foreign companies like Toyota over investing overseas rather than in the U.S.
But on its face, the "Buy American, Hire American" motto appears to overlook the significant impact foreign direct investment has on the U.S. economy. A report by the Congressional Research Service in June found international investors funneled $379 billion into U.S. businesses and real estate in 2015 alone. Foreign firms also were believed to have had more than 6,600 affiliates operating in the U.S. at the time.
A separate study published last year by the Commerce Department pegged 2015 foreign direct investment at a more modest $348 billion, which the department said was a record. Affiliates of international companies with operations in the U.S. were found to have employed at least 6.1 million American workers in 2013 while producing at least $360 billion in goods exports. Collectively, majority foreign-owned affiliates of foreign companies accounted for 16.4 percent of all research and development expenditures carried out by businesses in the U.S. that year. And companies tied to the U.K., Germany and Japan were among the largest investors in American business operations.
Foreign investment into the U.S. has ticked up in recent years as the White House has worked to attract international interest. In 2011, former President Barack Obama's administration launched the SelectUSA initiative specifically to attract both domestic and international investment.
And though the Trump administration hasn't been shy about targeting regulations and health care reform implemented under his predecessor, his administration appears to have taken a liking to the program. Commerce Secretary Wilbur Ross – along with Treasury Secretary Steven Mnuchin, Labor Secretary Alexander Acosta and Energy Secretary Rick Perry – in June attended a SelectUSA summit at which Ross reiterated the administration's commitment to "creating a business-friendly environment across our nation."
"The support of my fellow Cabinet secretaries at the summit is just further proof that the administration welcomes global investment to strengthen our local economies and to ensure job creation," Ross said in a statement at the time.
In part because of this executive branch outreach and in part because of the strength of the U.S. consumer, America is widely considered to be one of the world's premier destinations for foreign companies to do business. An investment confidence index published earlier this year by A.T. Kearney placed the U.S. just above Germany, China and the U.K. as the world's international investment front-runner.
Trump appears to be motivated in part by a desire to solidify that global standing through the passage of tax reform and reduction of private sector regulations that he believes hold back businesses operating in the U.S.
But as the latest Foxconn factory news suggests, that "Buy American, Hire American" slogan isn't as straightforward as it sounds.
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