Tech giants call Trump tariffs 'big headache'

Chairman Young Liu claims Foxconn's largest tech partners are getting a "big headache" from the Trump administration's tariff strategy. Foxconn held its latest earnings call on Friday, during which Liu discussed the impact of the U.S. government's recent trend of rapid declaration and rescinding of tariffs on its business.

“Judging by the attitude and the approach we see the US government taking towards tariffs, it is very, very hard to predict how things will develop over the next year," shared Liu in the Friday earnings call. “The issue of tariffs is something that is giving the CEOs of our customers a big headache."

Hon Hai Precision Industry Co., better known as Foxconn Technology, is the world's largest electronics contract manufacturer. Known for producing most of Apple's supply of iPhones and other devices, Foxconn also manufactures the big three modern video game consoles, Amazon and Nvidia server equipment, CPU sockets, displays, and countless other flavors of modern electronics at plants worldwide.

Liu continued, claiming that many customers have been coming to Foxconn and planning to move more manufacturing to the U.S. in response to tariff insecurity. Thanks to its failed Wisconsin Valley project, Foxconn does not have a sterling reputation for U.S. manufacturing moves; the company pledged $10 billion to the region to employ 13,000 workers. However, Foxconn has now mostly abandoned the project, much to the chagrin of the state's residents.

Chip War With China Continues To Intensify

For companies like Apple to come to Foxconn and begin planning to move manufacturing to the United States either speaks to an overconfident Foxconn or a tech industry very worried by President Trump's frenetic tariff strategy. Trump has escalated his "chip war" with China to a much wider-scale tariff offensive aimed at China, Mexico, Canada, and other countries, asserting that tariffs are the key to boosting the U.S. economy and supply chain. Recently, Trump's promised tariffs have often been delayed or canceled before they can begin, adding a layer of insecurity to an already confused market.

"Under the uncertainties related to geopolitics and tariffs, manufacturing will face challenges and demand might also suffer,” Liu stated to shareholders. As President Trump dismantles the Biden-era CHIPS Act and welcomes TSMC's new $100 billion investment into Arizona spurred on by fear of tariffs, the U.S. policy on the tech industry is suddenly doing an about-face. Tech companies looking to maximize operations and profits in the second Trump era must consider the correct response to the threat of tariffs harming margins, assuming such tariffs aren't taken back early.

Foxconn is not likely to struggle too much in the upcoming business year. Server assembly revenue grew 78% in Q4 2024, with the success of mid-level AI firms like DeepSeek causing Liu to predict that this sector will double for Foxconn in the current quarter. Whatever comes for the world's tech giants, mercenary companies like Foxconn will likely benefit, even in the face of its subpar performance in places like Wisconsin.