Late last month, President Trump met with Terry Gou, chairman of Foxconn, a Taiwan-based electronics company known for manufacturing iPhones. Foxconn is the world’s 10th largest private employer — a list headed by the U.S. Defense Department and including more-well-known corporations such as Walmart and McDonald’s.
Standing together at the White House, Trump and Gou announced that Foxconn would open a flat-screen-panel factory in Wisconsin that would employ thousands of U.S. workers. “TV was invented in America,” Gou said at the news conference, before noting that the manufacturing of television parts within the United States has all but ceased. “We are going to change that,” he declared. “It starts today in Wisconsin.”
The deal is being hailed for offering benefits to both Foxconn and U.S. workers. Foxconn gets to change the narrative about its dubious labor practices, while U.S. workers gain new, skilled manufacturing jobs. This is no small PR feat. In 2010, the bleak living and working conditions at Foxconn’s Chinese factories received international attention when 14 workers jumped off their dormitory roofs and died. Given this history, it is ironic that the corporation is positioning itself as an ally of U.S. workers.
But Foxconn’s purported aid to U.S. workers threatens a worse evil than distracting from the company’s abysmal labor history: It distracts from the larger structural problems confronting U.S. workers.
This isn’t the first time that the interests of Taiwanese corporations and U.S. workers have coincided in ways that obscured the broader structural problems within the labor market. In the 1970s, the U.S. labor movement’s “Buy American” campaigns linked the purchasing of U.S.-made union products with the preservation of U.S. jobs. They also called for greater protections from imports, especially from Taiwan.
Precisely because it was a focus of the Buy American movement, Taiwan’s Board of Foreign Trade started to fund campaigns of its own, in which it encouraged Taiwanese companies to increase their purchases of U.S.-made goods. In doing so, Taiwan hoped to lessen its trade surplus with the United States and avoid broader trading restrictions such as increased tariffs. It, too, called its campaigns Buy American.
By adopting the language of the U.S. labor movement, Taiwan sought to present itself as an ally of the United States and its workers. This image was especially important to its leaders in this moment, given that President Richard Nixon and Chairman Mao Zedong had only recently reopened political ties across the Taiwan Strait. Taiwan hoped to use its campaign as part of its attempts to retain diplomatic ties with the United States. Its leaders were worried — correctly it turned out — that the United States would shift its formal diplomatic recognition of “China” to the People’s Republic of China on the mainland, not Taiwan.
RCA, a U.S.-based company that manufactured electronics such as televisions, was a major beneficiary of Taiwan’s Buy American campaign. In August 1973, the company announced that it had made its biggest single sale of color television sets ever. Its customer was Taiwan.
These televisions went on to become part of an elaborate display of U.S. products at Taiwan’s Far Eastern Department Stores — a chain with outlets across the island. U.S. television sets boasted a higher-quality image and a new technological addition: remote controls.
The televisions made for good publicity, yet electronics were the exception. The vast majority of U.S. goods sold through Taiwan’s Buy American campaign were agricultural items, particularly grain. Moreover, despite the fanfare, it was in this same decade that increasing numbers of RCA television sets began being manufactured outside the United States. While they were American-branded, they were not American-made. In some cases, RCA televisions were even manufactured in Taiwan itself.
RCA’s business boomed while its U.S. factories closed. This reflected the economic trend of the decade, which saw growing numbers of U.S. corporations move their manufacturing production abroad in pursuit of lower labor costs. In fact, this is the narrative Trump has seized upon in promising to bring manufacturing back to the United States. With announcements such as Foxconn’s, he purports to be reversing the shifts of which Taiwan was such an integral part in the 1970s.
Yet Trump is focusing on the wrong problem. The United States is currently the world’s second-largest exporter after China. It still makes things, selling more goods than it does services. The problem is that the number of people employed in these manufacturing jobs is decreasing. And growing automation does not bode well for the long-term prospects of bringing manufacturing jobs back to the United States. Gou may be opening more factories, but he also speaks of replacing workers with “Foxbots” in the near future.
Thus the false promise of the Foxconn announcement: A new factory carries with it a simple message of new jobs, which easily gains traction. Indeed, Gou echoed the 1970s campaigns when he proclaimed at the White House conference that Foxconn was “strongly supporting Buy American.” However, for the millions of Americans living in towns affected by the closures of factory doors, America’s high total export figures are of little comfort, and one more factory won’t change that.
Like Taiwan’s Buy American campaign in the 1970s, a Foxconn factory in Wisconsin provides extensive publicity but limited economic relief. To secure the deal, Wisconsin legislators have rushed to provide Foxconn with one of the largest incentive packages in U.S. history: providing $3 billion of tax concessions and waiving environmental regulations.
Perhaps more damaging: The announcement perpetuates the narrative that deindustrialization is the core problem facing U.S. workers. The Foxconn deal does nothing to address much-needed structural solutions: a living wage, less workforce casualization and affordable health care. Crucially, Trump met with Gou at the White House to announce the Foxconn decision at the very moment Republicans in Congress sought to dismantle Obamacare, which has extended health insurance to millions of U.S. workers.
In Trump’s view, U.S. workers simply need a few new factories. But the much deeper systemic problems that U.S. workers face cannot be cured by corporations such as Foxconn. As Trump so masterfully manipulates the idea of a “return” to manufacturing, he is eroding U.S. health, schooling and social support structures. This is the biggest con of all.