In June 2018, his trade war wasn’t going very well so Trump and then–Gov. Scott Walker of Wisconsin gave us the Foxconn Hustle, a $10 billion scheme that was supposed to result in a 20 million-square-foot factory on outskirts of Milwaukee for Taiwanese tech giant Foxconn. Instead, this desperate attempt at producing an economic “win” ahead of the midterm election ended up being another example of his failed economic policies.
January 2018 is when Trump announced YUGE tariffs on imported solar panels and residential washing machines, effectively launching a trade war that decimated the farm industry, put manufacturing in a recession, and placed 100% of the cost of tariffs directly on American businesses and consumers.
Trump’s trade war was going so badly at the time, that Republicans began talking about reining-in his use of tariffs. For example, soon-to-be-retired Sen. Pat Toomey (PA) — Pennsylvania is a steel state — joined faux-conservative Sen. Mike Lee to co-sponsor the Global Trade Accountability Act (S.177) to end Trump’s abusive practice of using “national security” to impose tariffs and to return tariff authority back to Congress where it Constitutionally belongs.
I'll be cosponsoring @SenMikeLee's bill, S.177, to rein in the executive branch's power to impose unilateral tax increases like these.
— Senator Pat Toomey (@SenToomey) June 1, 2018
If this devolves into a full-blown trade war, the resulting harm will undo all of the great economic progress we’ve made with deregulation and tax reform.
— Senator Pat Toomey (@SenToomey) June 1, 2018
Other Republicans who joined with Toomey and Lee were retired-Sen. Jeff Flake (AZ), soon to be ex-Sen. Corey Gardner (CO), and part-time conservative and full-time political opportunist Sen. Ben Sasse (NE).
One look at this line-up of sponsors, and you know why the bill never went anywhere.
Desperate to direct attention away from his trade war failures, Trump gave America the Foxconn Hustle. “The eighth wonder of the world,” he proclaimed at the dedication ceremony, calling it proof that he was “reclaiming our country’s proud manufacturing legacy.”
If only that had been true. Instead, as we learn in a Reason.com article, this “deal” looks worse than ever.
A little more than two years [after the groundbreaking], the factory that was supposed to produce LCD screens for TVs and smartphones doesn’t exist and “probably never will,” reports The Verge this week in a must-read investigation into the downfall of Wisconsin’s propped-up Foxconn project.
The buildings that have been built on the plot of land where Trump and Walker overturned ceremonial shovels of dirt two years ago are being used for storage, not manufacturing. Promised renovations to a decades-old skyscraper in downtown Milwaukee—once intended to be Foxconn’s U.S. headquarters—have not materialized. Neither have most of the 13,000 jobs the company promised to create in return for piles of public cash.
“Even the handful of jobs the company claims to have created are less than real: many of them held by people with nothing to do, hired so the company could reach the number required for it to get tax subsidy payments from Wisconsin,” writes The Verge‘s Josh Dzieza. “Foxconn failed at that objective, too: last week, Wisconsin rejected the company’s subsidy application and found it had employed only 281 people eligible under the contract at the end of 2019. Many have since been laid off.”
The simple truth is that Donald “Art of the Deal” Trump’s Foxconn Hustle was a lie. As Reason.com further explains, the numbers didn’t add up.
The state’s Legislative Fiscal Bureau, a number-crunching agency similar to the federal Congressional Budget Office, calculated that it would take the state until 2043 to recoup the $3 billion handout, which was the largest such subsidy in Wisconsin history. Even if all 13,000 promised jobs went to Wisconsinites, the tab would be more than $230,000 per job created, the bureau found.
A separate analysis conducted by the Mercatus Center, a free market think tank based at George Mason University, found that the higher taxes needed to cover the cost of Foxconn’s tax breaks would “decrease Wisconsin’s long-run GDP by about $20 billion over the 15-year life of the handout.” And that tally didn’t include the cost of local utility infrastructure updates, which the state promised to cover in full as part of the deal with Foxconn.
Almost from the start, there have been red flags surrounding the Foxconn project. The town of Mount Pleasant, Wisconsin, used eminent domain to seize productive farmland for the now-defunct LCD factory project. Walker struck the $3 billion subsidy agreement without going through official governmental channels. And Foxconn has a long history of failing to live up to job creation promises connected to public giveaways.
The deal was never going to succeed, and Trump knew it, but seeing it succeed was never the point.
The Foxconn Hustle was never meant to do anything other than secure Walker’s legacy, boost Trump’s economic message, and save Republicans from disaster in 2018 — and abandoning conservatism to embrace Trump’s nationalism was a price the GOP was willing to pay to achieve their objectives.
The Foxconn Hustle was a sham perpetrated on the American people. There is no factory. Walker’s legacy has been destroyed — because everything Trump touches dies (#ETTD) — and the nationalism dogma embraced by Trump and the GOP has failed, just as it has in past scams.
Besides the fact that tariffs are simply terrible economic and foreign policy, Trump has used his trade war as leverage for his personal financial gain. He used it to extort money from the Chinese government to finance Trump golf courses and hotels in Indonesia and to secure a boatload of trademarks for his and Ivanka’s business interests in China.
Desperate to salvage his crumbling reelection prospects, Trump has continued to crow about the successes of his trade war, the awesome economy he has built, and the millions of jobs he’s created. Unfortunately for Trump, the reality of his economic policies are diametrically opposed to the reality being lived by the voters he needs to win.
In other words, Trump’s economic policies have turned out just as predicted, and the Foxconn Hustle is just another example of his failures.
David Leach is the owner of the Strident Conservative. He holds people of every political stripe accountable for their failure to uphold conservative values, and he promotes those values instead of political parties.