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Thread: Tech Suppliers Shift Away From China Despite Trump Tariff Delay

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    Default Tech Suppliers Shift Away From China Despite Trump Tariff Delay

    HP Inc.-laptop maker Inventec Corp. said it will to shift production of notebooks for the U.S. market out of China within months, adding to the tech industry’s exodus as the world’s two largest economies escalate their trade war.

    Inventec plans to move its entire American-bound laptop operation to its home base of Taiwan within two to three months, President Maurice Wu said on a post-earnings call Tuesday. Wu’s company assembles Apple Inc.’s AirPods and produces notebook computers for HP, which accounts for an estimated third of its revenue.

    Underscoring the difficulty of making such long-term production decisions, President Donald Trump said just hours later that the U.S. would push back implementation of tariffs on Chinese-made laptop and other products to December from September. But tech companies aren’t waiting for a trade resolution. From Inventec to Apple-assembler Hon Hai Precision Industry Co., Taiwanese companies that make most of the world’s electronics are reconsidering their reliance on the world’s No. 2 economy as Washington-Beijing tensions simmer.

    “The trade war is very painful for us,” Wu said, concluding a call during which executives shared how production shifts have hurt the company’s efficiency and margins.

    Rising tariffs on Chinese-made products threaten to wipe out their margins and up-end a well-oiled, decades-old supply chain. Microsoft Corp., Amazon.com Inc., Sony Corp. and Nintendo Co. are said to be among those now weighing their options away from the line of fire, such as Southeast Asia and India. Alphabet Inc.’s Google has already shifted much of its production of U.S.-bound motherboards to Taiwan, Bloomberg News has reported.

    Inventec’s shift marks one of the most dramatic relocations since Trump announced his decision to slap 10% tariffs on $300 billion of Chinese imports -- including consumer gadgets from smartphones to notebooks -- originally slated for next month. Spurred on by clients, which include household names like Dell Technologies Inc. and Nintendo, many Taiwanese contract manufacturers are now drawing up contingency plans, shifting select assembly operations or exploring alternative venues.

    Analysts anticipate the tariff delay will have little impact on those plans.

    “While this announcement appears to provide incremental (and market-friendly) information as to how the White House is approaching trade policy, we do not believe it represents a substantial shift in the U.S.-China dispute,” Goldman Sachs analysts wrote in response. “Our broader expectation is that the U.S. and China are unlikely to reach a lasting agreement prior to the 2020 election that provides certainty around tariff rates on imports from China.”

    On Tuesday, Compal Electronics Inc. Chief Executive Officer Martin Wong said his company, a rival to Inventec, has also shifted some notebook lines to Taiwan and was considering investing more in Vietnam should tariff-conflicts persist. Quanta Computer Inc. Chairman Barry Lam told reporters Tuesday his company is definitely re-locating some business to Southeast Asia, though he didn’t mention a timeframe. Chief Financial Officer Elton Yang said Quanta will for now aim to satisfy customers’ demands for production outside of China with their Taiwan facilities.

    U.S. companies, long accustomed to using China as the world’s workshop, are looking to diversify their manufacturing operations as the uncertainty over volatile trade policy heightens and Beijing shows a willingness to clamp down on foreign firms within its own borders. It’s a shift that may herald a broader, long-term trend as Beijing and Washington continue to spar over everything from market access to trade.
    https://finance.yahoo.com/news/very-...093211163.html

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    Walmart's earnings beat allays worry over tariff impact for now
    https://www.reuters.com/article/us-w...-idUSKCN1V514R
    Analysts said the contrast in performance indicates there is no evidence to suggest a broad drop in demand in the economy and retailers posting lower growth need to improve their business strategies.

    U.S. retail sales surged in July, which could help to assuage financial markets’ fears that the economy was heading into recession.

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    This is good; hopefully these leftist controlled companies can shift it back to America.
    "When government fears the people, there is liberty. When the people fear the government, there is tyranny."


    A lie doesn't become the truth, wrong doesn't become right, and evil doesn't become good just because it is accepted by a majority.
    Author: Booker T. Washington



    Quote Originally Posted by Nomad View Post
    Unless you just can't stand the idea of "ni**ers" teaching white kids.


    Quote Originally Posted by AProudLefty View Post
    Address the topic, not other posters.

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    Quote Originally Posted by anatta View Post
    Walmart's earnings beat allays worry over tariff impact for now
    https://www.reuters.com/article/us-w...-idUSKCN1V514R
    Analysts said the contrast in performance indicates there is no evidence to suggest a broad drop in demand in the economy and retailers posting lower growth need to improve their business strategies.

    U.S. retail sales surged in July, which could help to assuage financial markets’ fears that the economy was heading into recession.
    The Tariffs have had little effect so far. The FAKE media is attempting to blow it out of proportion along with news of a possible recession in order to boost the chances of the Democratic candidates.

    "When government fears the people, there is liberty. When the people fear the government, there is tyranny."


    A lie doesn't become the truth, wrong doesn't become right, and evil doesn't become good just because it is accepted by a majority.
    Author: Booker T. Washington



    Quote Originally Posted by Nomad View Post
    Unless you just can't stand the idea of "ni**ers" teaching white kids.


    Quote Originally Posted by AProudLefty View Post
    Address the topic, not other posters.

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    Quote Originally Posted by Truth Detector View Post
    This is good; hopefully these leftist controlled companies can shift it back to America.
    Chin a is still a major beast, but it shows how quickly supply chains can shift away.
    I think Walmart is also trying to shift away from buying everything from China

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    Thats gonna leave a mark on PRC.
    They really cant risk much more time. Every day closer to them agreeing to a MUTUALLY beneficial trade agreement.
    "Those who vote decide nothing. Those who count the vote decide everything." Joseph Stalin
    The USA has lost WWIV to China with no other weapons but China Virus and some cash to buy democrats.

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    Quote Originally Posted by anatta View Post
    Chin a is still a major beast, but it shows how quickly supply chains can shift away.
    I think Walmart is also trying to shift away from buying everything from China
    They forced their suppliers to move there. Walmart was one of the big causes of the Chinese financial wonder. Our corporations are there too.
    Do you think Trump's blundering is going to change this? http://www.jiesworld.com/internation...s_in_china.htm They are twiddling their thumbs until he goes away.

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    Quote Originally Posted by Gonzomin View Post
    They forced their suppliers to move there. Walmart was one of the big causes of the Chinese financial wonder. Our corporations are there too.
    Do you think Trump's blundering is going to change this? http://www.jiesworld.com/internation...s_in_china.htm They are twiddling their thumbs until he goes away.
    from what I've heard China is not awarding contracts to US firms doing business in China

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