In a move to mitigate tariff uncertainties, Newell Brands NWL, the firm behind Sharpie pens, is shifting some of its production out of China. The company’s writing business manufacturing will be relocated to Tennessee.
What Happened: CEO Chris Peterson clarified that this shift in the supply chain is not a response to Donald Trump‘s campaign promise of increased tariffs on Chinese goods, Reuters reported on Wednesday.
“There’s a lot of uncertainty. We just want to reduce our exposure regardless of the outcome,” Peterson explained.
Peterson also mentioned that Newell is automating its U.S. manufacturing to accommodate higher wages in the United States. This move also saves on time and fluctuating freight costs.
The company has plans to move its kitchen appliance manufacturing from China to Vietnam, Thailand, Indonesia, and other locations. Peterson emphasized that Newell is not exiting China but “reducing our dependence.”
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By the end of next year, Newell expects less than 10% of the company’s U.S. business to be exposed to Chinese manufacturing, compared to about 15% currently. Five years ago, the figure was around 35%, Peterson added.
Why It Matters: This move by Newell Brands comes amid a turbulent trade environment. In May, President Joe Biden announced a significant increase in tariffs on a range of Chinese goods to protect American industries and jobs. This was followed by China launching an anti-dumping probe into plastics made in the U.S. and the European Union, seen as a retaliation against the increased tariffs.
During the 2024 presidential debate, former President Donald Trump warned about China’s economic actions leading to the country gaining undue influence over the United States.
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Image by Mike Mozart via Flickr
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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