Taiwan's Foxconn says biggest challenge is US-China trade war

  • Taiwan's Foxconn, the world's largest electronics contract manufacturer said that the biggest challenge the company is facing is the threat of a trade war between the U.S. and China.
Foxconn's booth at the CES Asia 2018 show in Shanghai, China, on June 13, 2018.
Qilai Shen | Bloomberg | Getty Images
Foxconn's booth at the CES Asia 2018 show in Shanghai, China, on June 13, 2018.

Foxconn, the world's largest electronics contract manufacturer and a major supplier for Apple, said on Friday the biggest challenge the company is facing is the threat of a trade war between Washington and Beijing.

President Donald Trump threatened on Monday to hit $200 billion of Chinese imports with 10 percent tariffs if Beijing retaliates against his previous announcement to target $50 billion in imports. The United States has accused China of stealing U.S. intellectual property, a charge Beijing denies.

"The biggest challenge we're facing is the U.S.-China trade war. In terms of how we manage and adapt, this is something all our high-level managers are making various plans on," Chairman Terry Gou said at the company's annual general meeting.

He did not elaborate on what kind of plans were under consideration.

A Sino-U.S. trade war could disrupt supply chains for the technology and auto industries, sectors heavily reliant on outsourced components, and derail growth for the world economy.

The United States and China are Taiwan's top export markets.

Foxconn, a major supplier for Apple, is formally known as Hon Hai Precision Industry.

For 2018, Gou said it was necessary to be mindful of the uncertainties of inflation and the pace of interest rate rises, adding that the Chinese economy continues to be affected by "structural adjustments".

Shares of Foxconn were down 0.7 percent on Friday, in line with the benchmark index.