It was already known that Trumps ‘s measures against China would have major consequences. Given that the Eastern country did not meet the requirements of the United States, it decided to increase the trade tariffs for products exported to China considerably. China has not stopped to think about it and has also set trade rates of up to 25 percent. The rates will come into effect later this month. Several companies, including Apple and Google, are now trying to avert the effect of trade rates. To make this possible, they must produce products outside of China; quite a challenge. According to Bloomberg , Google is now officially working on that.
Bloomberg ‘s report specifically refers to production for the US. It is therefore quite likely that all production for the European and other American and Canadian markets will still take place in China. For the production of Nest equipment, Google has moved to Taiwan and Malaysia, while it has the motherboards for servers from Google produced in Taiwan. By relocating production, it prevents a deteriorated financial situation by having to pay a high import tax. In addition, it should then pass on the costs to customers, or bear the bill itself. The relocation makes Google’s supply chain quite complicated.
Google follows Apple and GoPro
As stated earlier, Google is not the first party to move its production. Earlier it was announced that Apple, together with Foxconn, was investigating whether it would be possible to pick up the production of iPhones outside of China . In the short term it will be difficult to relocate all production from China, especially as parts suppliers are based in China. GoPro has moved the production of the cameras for the United States to Mexico. For the US, the measures are therefore not effective, there are only a few companies that relocated their production entirely to the US. We are now waiting for the next steps from the US and China.