Microsoft Corp. MSFT, HP Inc. HPQ, and Dell Technologies Inc. DELL are ramping up their production of electronic components in China. This comes as they prepare for potential tariff hikes on Chinese imports as President-elect Donald Trump is set to return to the White House in January.
What Happened: These tech giants are accelerating their production efforts in China. Microsoft is pushing suppliers to boost output for its cloud server infrastructure while moving Xbox console assembly out of China. The company also plans to produce as many Surface laptops as possible outside China by the end of next year, Nikkei Asia reported on Thursday.
Meanwhile, HP and Dell are urging suppliers to increase parts production this month and next, revisiting their procurement strategies for 2025 to lessen dependency on Chinese-made components. The increased output aims to enhance production in regions not affected by U.S. tariffs, such as Southeast Asia. Suppliers are expanding production capacity and establishing warehouses in Thailand to support HP’s needs.
Dell is also considering production options outside Vietnam to mitigate geopolitical risks. The tech supply chain is preparing for disruptions, with companies like Apple Inc. AAPL increasing iPhone production in India.
See Also: Tesla, Rivian Signal End To 4-Year Legal Battle Over Alleged Trade Secrets Theft
Why It Matters: The decision by these tech companies to ramp up production in China comes amid rising fears of a renewed trade war between the U.S. and China. Recently, President-elect Trump named Jamieson Greer, known for his tough stance on China, as his pick for U.S. Trade Representative.
Furthermore, China’s state media praised American companies like Apple, Tesla Inc. TSLA, and Starbucks Corp. SBUX for their collaboration with Chinese partners, urging U.S. policymakers to consider the willingness of American businesses to engage in economic cooperation.
This praise coincides with Trump’s announcement of a 10% tariff on Chinese goods, aimed at addressing the opioid crisis in the U.S., highlighting the complex dynamics at play in U.S.-China trade relations.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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