President Donald Trump has hailed several mega projects by foreign investors as evidence of creating US manufacturing jobs; however, behind closed doors, those projects were made possible by the billions of dollars in public subsidies that boosted the competitiveness of the US economy. 

Arguably, the most emblematic of these is Foxconn’s controversial $10bn planned investment in Wisconsin.


In what was the third largest foreign greenfield project in US history, the Taiwanese computer parts manufacturer announced plans in July 2017 to build an LCD factory and assembly complex in Mount Pleasant, Wisconsin. 

The almost 2m sq ft facility promised to create an initial 3000 jobs, rising to 13,000 at full capacity. Trump hailed the project as a success of his administration, calling it “the eighth wonder of the world”, and posing for a picture with a golden shovel when the project broke ground.

Despite the generous state and local incentive package worth $4.79bn used to entice Foxconn, the project has fallen short of Mr Trump's ambitious expectations. 

The company is now due to build a different kind of factory to what originally agreed, producing smaller LCD panels which experts have said is less likely to attract additional suppliers hoping to do business with Foxconn. 

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Subsidy mania

Despite the state subsidies being “performance-based” — meaning Foxconn must meet job creation and investment targets to earn them — the amount offered for each job far exceeded the standard, raising questions of whether the incentives were even worth it.

“I’m worried that the project is never going to materialise in a way that will enable those local governments to pay back those debt obligations,” says Greg LeRoy, the executive director at Good Jobs First, a Washington DC-based non-partisan group that tracks subsidies and promotes accountability in economic development.

Foxconn is no exception though. When another Taiwanese company, semiconductor powerhouse TSMC, announced a $12bn plant investment in Arizona earlier in 2020, White House officials touted it as another win in the country’s battle with China for technological supremacy. TSMC, however, has repeatedly stated publicly that the deal will only take place if the cost differential between Taiwan and Arizona can be eliminated through subsidies and other incentives. 

Overall, during Mr Trump’s years at the White House, federal and state subsidies supported 58 mega projects with contributions of over $100m, with the likes of Foxconn, Toyota-Mazda, Amazon and Fiat-Chrysler at the receiving end. 

The US has gained several landmark megaprojects and growing flows of investment and foreign investment since Mr Trump assumed office. He made good use of them to reiterate the potential and success of his ‘America first’ platform. However, his touted successes appear less impressive after factoring in these subsidies and other types of public support. 

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This article first appeared in the October - November print edition of fDi Intelligence. View a digital edition of the magazine here