GoPro plans to move parts of its production out of China to avoid possible US tariffs. The tech company released a statement on Monday that they will move the production of most of their cameras bound to be marketed in the United States to other countries next summer.
Brian McGee, Chief Financial officer of the company, said in a statement that they are proactively addressing tariff concerns by moving most of their US bond camera production out of China. The company said that they will continue their production of cameras to be marketed in other countries in China.
The on-going trade war between the two economic giants imposed $250 billion of Chinese exports more expensive for the American market. The trade war electronic manufacturers, industrial machinery makers, and fashion brands to redirect their operations to other business links to protect their interests.
Companies that are moving out of China transfer their operations in other Asian countries like Cambodia and Vietnam. They are reluctant to operate in the United States since China also imposes tariffs on US goods. Companies choose other countries because tariffs don't apply in these countries and labor is cheap. GoPro did not mention the exact location of their planned transfer.
According to reports, the United States was supposed to implement another tariff hike on $200 billion Chinese goods but it was delayed for three months after a truce between President Donald Trump and President Xi Jinping was agreed. It is not yet certain whether the situation of the trade war will get better after the three-month truce.
CEO Nick Woodman said that during an interview with CNN Business in September that they are fortunate that they have a much-focused product line and they have manufacturing partners that already have some facilities outside of China.
GoPro's operation is not big enough to cause a significant effect on China's economy. However, if other businesses follow the same trend it will surely cause concern for Beijing. Christopher Balding, a China expert at Fulbright University Vietnam, said that if a company like Foxconn moved even symbolic production to a country like Vietnam that would be an earthquake for China.
The company's stock has dropped by 94 percent since its peak in 2014. According to McGee, they own their own production equipment while their manufacturing partners provide the facilities and they are expecting to make the move at a relatively low cost.
