SoftBank pledges $50 bn as Trump woos Asian companies
BRINGING BACK JOBS? Apple supplier Foxconn too planning to expand US operations
Two of Asia’s biggest technology companies are looking to expand investment in the US, as President-elect Donald Trump pushes to bring manufacturing and jobs back home.
Billionaire businessman Masayoshi Son, also the head of Japan’s SoftBank Group, pledged a $50-billion investment in the US, and Apple Inc supplier Foxconn said it was in preliminary discussions to expand its US operations.
Following the news, SoftBank shares jumped 6% on the Tokyo stock exchange.
Son said on Tuesday, after meeting Trump, his investment would create 50,000 new jobs, a move the US President-elect claimed was a direct result of his election win.
The investment pledge revived speculation that US telecoms giant Sprint Corp, 82% owned by SoftBank, might rekindle merger talks with T-Mobile US Inc that died under pressure from US regulators.
Trump’s moves since the election to engage with individual companies, while turning his back on broader, years-in-theworks trade deals, show that he is leaning on the deal-making skills he honed in the boardroom.
Trump campaigned against the over-regulation of business and is expected to be more open to mergers than President Barack Obama.
The $50 billion investment, announced jointly by Trump and Son in the lobby of the Trump Tower in Manhattan, would come from the $100 billion tech investment fund the head of SoftBank is setting up with Saudi Arabia’s sovereign-wealth fund and other potential partners, according to the Wall Street Journal.
“Ladies and gentlemen, this is Masa from SoftBank of Japan, and he’s just agreed to invest $50 billion in the United States and 50,000 jobs,” Trump said.
“He would never do this had we (Trump) not won the election!” Trump later Tweeted.
Son said his company would create the jobs by investing in startup companies, adding, that he expected a lot of “deregulation” under the Trump administration.
Trump and Son did not give a timeline for the investment. Trump’s four-year term will begin after his January 20 inauguration.
Son’s business partner Foxconn issued a brief statement after a report by broadcaster CNBC showing a snapshot of a page held by Son outlining the investment carrying the logos of SoftBank and the Taiwanese firm, formally known as Hon Hai Precision Industry Co. The page also showed an additional $7 billion investment and creation of a further 50,000 jobs.
“While the scope of the potential investment has not been determined, we will announce the details of any plans following the completion of direct discussions between our leadership and the relevant US officials,” the Foxconn statement said.
India with a large domestic economy will be less affected by changes in growth and monetary policy in the new set-up under Donald Trump administration, S&P Global Ratings said on Wednesday.
In a report on the effect of Trump’s victory in the presidential elections on Asia-Pacific economies, S&P said many key US policies under the new administration remain undefined, leading to unusual uncertainty around outlook.
“The effect of changes in the US growth and monetary policy on Asia’s trade and general financial market confidence, whether positive or negative, will be greater on smaller and more open economies of the region,” said Paul Gruenwald, chief economist, Asia-Pacific, S&P Global Ratings. “Countries with large domestic economies – China, Japan, India – will be less affected.”
The agency, however, said one will have to wait until Trump’s economic team is in place and its policy intentions become clear.