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Trump tariffs: US tech companies in exodus from China

US-China trade war, tech manufacturing base in China

Apple requested suppliers to assess the costs of shifting 15% to 30% of production to other Southeast Asian countries

Major US tech companies are moving manufacturing away from China as Trump’s trade war is resulting in punitive tariffs between both countries. HP and Dell plan to relocate nearly 30 percent of their notebook production from China, according to Nikkei. 

That said, others US tech companies including Microsoft, Amazon, Sony, and Nintendo are still considering moving part of their game console and smart speaker manufacturing outside of China.  

HP shares industry concerns that broad-based tariffs harm consumers by increasing the cost of electronics,” a spokesman said in a statement. “We are actively monitoring the situation and will continue to work with government officials to advocate for the best interests of customers, partners and consumers.”

Last month, Apple has requested its major suppliers including Foxconn to assess the costs of shifting 15 percent to 30 percent of  their production capacity from China to Southeast Asia.  Apple has had China as its production base for nearly two decades. The country has been able to bring hundreds of thousands of skilled workers at short notice to meet product demand. 

Nearly 5 million Chinese jobs rely on Apple’s manufacturing presence in the country, based on a study published on the company website. 

An executive told Nikkei, “A lower birth rate, higher labor costs and the risk of overly centralizing its production in one country. These adverse factors are not going anywhere.” That said, the executive added that the company is focused on diversifying production with or without the next round of US tariffs on Chinese imports. 

The trade war is disrupting the global electronics supply chain in countries beyond China. Vietnam, for example, is becoming a beneficiary of the trade war because of low labour cost and close proximity to China as manufacturing moves there. 

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