Posted on 07/19/2019 7:04:13 AM PDT by lasereye
The pace of companies moving production out of China is accelerating as more than 50 multinationals from Apple to Nintendo to Dell are rushing to escape the punitive tariffs placed by the U.S., according to the Nikkei Asian review.
The trade war between the U.S. and China has dragged on for more than a year with 25% tariffs placed on $200 billion of Chinese goods. President Donald Trump is still threatening to slap duties on another $325 billion of goods. In wake of the intensifying battle, more and more companies announced plans or are considering shifting manufacturing from China.
American personal computer makers HP and Dell could move up to 30% of their notebook production in China to Southeast Asia, Nikkei reported. Apple has asked its major suppliers to assess the cost implications of moving 15% to 30% of their production capacity from China to India, according to an earlier report from the Nikkei.
Japan’s Nintendo is also going to pull a portion of its video game console production from China to Vietnam, according to Nikkei.
Not only are foreign companies rethinking its production location, a handful of Chinese companies are also leaving China. Chinese multinational electronics company TCL is moving its TV production to Vietnam, while Chinese tire maker Sailun Tire is transitioning its manufacturing line to Thailand, Nikkei reported.
The prolonged trade battle seems to be taking a toll on the Chinese economy. Data on Monday showed its economic growth slowed to 6.2% in the second quarter — the weakest rate in at least 27 years.
Trump claimed the slower growth is evidence that China is losing the trade war as the country faces an exodus of companies.
“The United States Tariffs are having a major effect on companies wanting to leave China for non-tariffed countries. Thousands of companies are leaving. This is why China wants to make a deal,” Trump said in a twitter post on Monday.
It is sad though that not much of the production that is leaving China is relocating to the United States. Is making the rest of South East Asia great part of the MAGA agenda or am I mistaken that the trade war with China is a zero sum game?
Less intellectual property theft, less money for the Red Chinese military too.
All excellent. Let China go down the drain.
More winning, cue the whining losers on FR to tell us that this is not winning and could be temporary!
China is gaining too much power, so no this is not really about bringing those jobs back to America. It is more about lessening the growing threat of Chinese hegemony. Their growing threat is getting more & more apparent. In addition they are stealing a lot of American technological intellectual property.
It’s working.
I need to put a new roof on my garage. I was shopping for a pneumatic nail gun. I originally planned to buy a cheap Chinese one, because I’ll only use it one time. Well, the price went up due to the tariff. The cheap Chinese nailer is the same price as the American made name brand one.
“more than 50 multinationals” ...but thousands of small and medium companies - even some large Chinese companies, as the article notes.
The last round of tariffs (25% of $325 billion worth of Chinese imports) is going to knock the Chinese economy harder than all the rest of the tariffs so far.
Great news!
It is the responsibility of Congress to rein in insane laws that cripple manufacturing in this country. Trump is doing what he can with the more capricious regulations that are not specifically stated in law, but Congress has to fix their part of the problem too.
For example, if you discharge water, pure H2O, no contaminants as liquid or steam in California as part of your business processes? Yeah, you’ll be fined for discharging a toxic pollutant.
Water. Pure, unadulterated water.
A pollutant.
Yeah.
Any wonder manufacturers, even those who want to (and Apple has tried to move their manufacture back to the US as much as possible - they’re currently the only company producing entire computers in the US and even that’s on a limited basis) are finding it difficult and expensive?
I looked for my former company Caterpillar in this article, but they weren’t there.
In 2005 or so Caterpillar set a goal to ‘Win in China’, ie win the majority of the Chinese market for construction equipment. Their normal modus operandi is to build factories there and sell locally. This worked well in Japan and Europe.
I regarded China as a bad risk then and I was sure that was a mistake. It was. Cat built 39 facilities there and got a good portion of the market, but, in a Communist country you never really own the assets you create. It is a rule by dictatorship and not by law.
The Chinese market collapsed and continues to collapse.
I consider all the Chinese facilities at risk for nationalization, and I think the Cat executives are starting to realize that too.
5000 to go.
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