Today News – Manufacturers Shift Work From China to Avoid Tariffs | Trending News

2018-09-23T15:24:42+00:00 September 23rd, 2018|

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seoul-tokyo a growing number of Asian manufacturers of products ranging from memory chips to machine tools are moving to shift production from China to other factories in the region in the wake of US President Donald Trump’s tariffs on Chinese imports companies including SK Hynix of South Korea and fit CBC Electric – Sheba Machine Co and Komatsu of Japan began plotting production moves since July when the first tariffs hit and the shifts are now underway company representatives and others with knowledge of the plans told Reuters others such as Taiwanese computer maker Campbell Electronics and South Korea’s LG Electronics are making contingency plans in case the trade war continues or deepens the company representatives and other sources spoke on condition of anonymity because of the sensitivity of the issue the quick reactions to the u.s. tariffs are possible because many large manufacturers have facilities in multiple countries and can move at least small amounts of production without building new factories some governments notably in Taiwan and Thailand are actively encouraging companies to move work from China file workers are seen at a Foxconn factory in longhua Wang dong province China may 26th 2010 Foxconn is Apple’s main supplier of iPhones US tariffs the United States imposed 25% duties covering 50 billion dollars of Chinese made goods in July and a second round of 10% tariffs covering another 200 billion dollars of Chinese exports will come into effect next week latter rate will jump to 25% at the end of the year and Trump has threatened a third round of tariffs on 267 billion dollars of goods which would bring all of China’s exports to the United States into the tariff regime the tariffs threaten China’s status as a low-cost production base that along with the appeal of the fast-growing China market drew many companies to build factories and supply chains in the country over the past several decades and SK Hynix which makes computer memory chips work is underway to move production of certain chip modules back to South Korea from China like its US rival micron technology which is also moving some memory chip work from China to other Asian locations SK Hynix does some of its packaging and testing of chips China with the chips themselves mostly made elsewhere there are a few DRAM module products made in China that are exported to the United States said a source with direct knowledge of the situation referring to widely used dynamic random-access memory chips FK hynix is planning on bringing those drum module products to South Korea to avoid the tariff hit most of SK Hynix s production won’t be affected the source added since China’s dominance in computer and smartphone manufacturing makes it by far the largest market for DRAM chips Toshiba Machine Co says it plans to shift production of us-bound plastic molding machines from China to Japan or Thailand in October tools and car parts the machines are used for making plastic components such as automotive bumpers we’ve decided to shift part of our production from China because the impact of the tariffs is significant a spokesman said Mitsubishi Electric meanwhile says it is in the process of shifting production of us-bound machine tools used for metal processing from its manufacturing base in Dalian in northeastern China to a Japanese plant in Nagoya in Taiwan an executive at notebook PC and maker Compal who declined to be named said the trade wars impact had been limited so far but the company was studying its options we can also use facilities in Vietnam Mexico and Brazil as alternatives the executive said it won’t be easy because our majority production is in China no other country can replace that at this moment large companies small companies smaller companies are exploring their options to South Korean medical equipment manufacturer IM healthcare which makes products including air purifiers is studying a move to vietnam or south korea if the trade conflict intensifies a source with direct knowledge of the matter said some Asian governments hope for an economic and strategic boost from the us-china conflict in Taiwan the government is actively encouraging companies to move production out of China pledging last month to speed up its existing southbound policy to reduce economic reliance on China by encouraging companies to move supply chains to Southeast Asia Taiwan economics ministry official William Liu told Reuters that the trade war was a challenge and an opportunity for the self ruled island taiwan depends on china as an export market he noted but at the same time could see a boost in jobs from companies moving operations back home Thailand also hopes to benefit from the flow of technology and investment leaving China during the trade war said Kenneth sang 7 secretary-general of the eastern economic corridor AEC office of Thailand which is coordinating a forty five billion dollars project to attract investment into the country the EC last month took about 800 representatives of Chinese companies on a tour around the eastern industrial heartland and the country’s Board of investment has done seven road shows in China this year to woo-wee investors