Cracks show in electronics supply chain as trade war continues: report
Aug 15, 2019
The effects of the US-China trade war on the global supply chain for consumer electronics are beginning to show, reported Bloomberg on Thursday. Many manufacturers are moving operations out of China amid the uncertainty.
Why it matters: The conflict between the world’s two largest economies is not only affecting manufacturers in China and US farmers, but is also disrupting the decades-old global electronics supply chain that produces iPhones, laptops, and 4K televisions.
- Manufacturers are forced to pay special attention to where they produce goods to avoid high US tariffs on products made in China, while still looking to cater to consumers in the world’s most populous country.
Details: Some firms are uprooting production lines from China amid concerns that the tensions show no indication of cooling, Bloomberg reported.
- HP laptop-maker Inventec announced plans on Tuesday to shift production of notebooks for the US market out of China within months in response to President Trump’s threat to roll out full tariffs on Chinese-made goods.
- GoerTek, a Chinese acoustic components supplier for Apple’s Airpods, is trialing production of the wireless earbuds in Vietnam.
- Some Chinese firms are “de-Americanizing” their supply chains, reducing their reliance on US core technology out of fear that they will suffer the same fate as Chinese telecommunications equipment giant Huawei, which was put on a US trade blacklist in May.
- Foxconn, the Taiwan-based iPhone assembler, said in April that it would start producing the handsets on mass in India this year as the company reduces its footprint in China.