The trade war forces companies to look into plan B

Jul 4, 2019 07:53 GMT  ·  By
The trade war between the US and China force companies to look for production power elsewhere
   The trade war between the US and China force companies to look for production power elsewhere

Microsoft and a series of partners are reportedly considering moving the production of hardware from China to facilities in other countries amid the trade war between the United States and the Beijing government.

The Redmond-based software giant, as well as HP, Dell, and Amazon could transfer at least part of their production to non-Chinese production plants, a report from Nikkei reads.

HP and Dell want at least 30 percent of their production to run outside of China, while Microsoft is considering making the Xbox in a different country too. Amazon is eyeing a similar change for the Echo and Kindle, while Acer and Asustek are still looking into a possible migration to other production facilities for their PCs.

While none of these companies released a statement to confirm they are indeed looking into moving production out of China, this is a decision that makes sense given the trade tension between the two states.

Apple’s migration out of China

Apple, for example, is seen by many as the next big victim in this trade war, especially after the United States announced a series of sanctions against Chinese-based Huawei, including a complete ban from working with American companies.

Foxconn, which is one of the largest employers in China and the top Apple supplier, recommended the Cupertino-based tech giant to move production to Taiwan, explaining that the local production facilities can handle the manufacturing of iPhones.

“I am urging Apple to move to Taiwan,” Gou said in June. “I think it is very possible,” he continued.

Young Liu, board nominee and semiconductor division chief for Hon Hai, the company that owns Foxconn, offered a similar advice to Apple executives.

“Twenty-five percent of our production capacity is outside of China and we can help Apple respond to its needs in the U.S. market,” Liu said. “We have enough capacity to meet Apple’s demand.”

For the time being, however, no final decision is believed to have been made, albeit leaving China appears to become an option for more and more American companies.