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Tech firms are planning a Chinese exodus over Trump trade war

Tech firms are planning a Chinese exodus over Trump trade war

The US and Chinese flags. Guess which is which DON’T YOU MISS the days when the only impact of Donald Trump’s words were fake business people being fired from a fake business on ‘reality’ TV? Now his words have consequences, and the escalating tough talk between the United States and China has led to tech

Tech firms are planning a Chinese exodus over Trump trade war

The US and Chinese flags. Guess which is which

DON’T YOU MISS the days when the only impact of Donald Trump’s words were fake business people being fired from a fake business on ‘reality’ TV? Now his words have consequences, and the escalating tough talk between the United States and China has led to tech firms planning an exit strategy from the latter, according to a report in Nikkei

These aren’t small fry businesses, either. The report states that Amazon, Google, Hewlett-Packard, Dell, Sony, Nintendo, Asus, Lenovo and Microsoft are amongst the companies planning to up sticks out of China. Said companies have already begun, or are in the process of, moving their production to some of China’s neighbours, such as Thailand, Indonesia, Vietnam and Taiwan.

HP has plans to move 20 to 30 per cent of is production outside of China, while Dell has a “pilot run” of notebook production in Taiwan, Vietnam and the Philippines, according to Nikkei‘s sources. Amazon wants its Kindles and Echos to be built in Vietnam, and Microsoft is considering Thailand and Indonesia for its hardware.  

The firms join Apple in looking to shake things up in Asia. Last month, it was also reported that Cook & Co was aiming to move 15 to 30 per cent of its production outside of China

While this will cause some turbulence for the companies involved – moving factories isn’t exactly pain-free – it’s also worrying for China, which could see a large dent in its export market. Nikkei‘s report notes that China’s electronics exports are 136 times as valuable as they were in 1991, jumping from $10bn to $1.35tn over the intervening 28 years.   

The fact that work is already underway suggests that even if the US and China kiss and makeup tomorrow, things will still be a little bit bumpy. Perhaps in the long run, tech companies think that it’s worth the temporary turbulence if mixing up supply chains protect them from future flights of presidential pique. µ

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