The trade war is shifting sands for manufacturers
BIG TECH is moving production out of China as the trade war with the US starts to really hit home.
Google Nest and Nintendo are the first companies to announce that their products will no longer be produced in China. But instead of going to to the US for their new workforce (as was naively assumed that they might in some quarters), the real winners are other countries in South East Asia such as Thailand and Vietnam.
Nintendo is already planning two new consoles which some thought would appear at E3 but didn’t. Whenever these new Switch variants get announced officially, they’ll be fully built outside China for the first time.
Google and Google Nest have both made the change too. Google Cloud motherboards have shifted out of China, as have Nest smart home products. In both cases, this applies primarily to US-bound stock which would be subject to BPA Trump’s beloved tariffs if they were shipped from his least favourite country. Data centre products have shifted to Taiwan, whilst Nest products are split between Taiwan and Malaysia.
But they’re far from the first. GoPro actually struck the first blow late last year when it shifted action cam production out of China, long before the whole trade war went from cold to hot.
Separately, Foxconn has already said that it has enough capacity outside China to make enough iPhones for the US market if required, but that still leaves other devices such as the Google Pixel range, also made by Foxconn. Huawei devices were also Foxconn productions, but they are currently on hold pending a decision about Huawei’s future in a Trump-led world.
With no end in sight to the trans-continental bickering, expect to see a few more companies put their cards on the table and shift out of China before the tariffs kick in at the end of the month. μ
Source : Inquirer