GoPro moving some production out of China to avoid US tariffs

GoPro is moving some of its production out of China in order to protect its business from potential new US t...

Posted: Dec 10, 2018 11:38 AM
Updated: Dec 10, 2018 11:38 AM

GoPro is moving some of its production out of China in order to protect its business from potential new US tariffs.

The tech company said Monday that it would move production of "most" cameras bound for the United States to another country by next summer.

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"We're proactively addressing tariff concerns by moving most of our US-bound camera production out of China," Brian McGee, the company's chief financial officer, said in a statement.

GoPro will continue to make cameras bound for other international markets in China.

The trade war between the United States and China has made more than $250 billion of Chinese exports more expensive for Americans — from leather belts to refrigerators to motorcycles.

The disruption to the world's biggest trading relationship has some electronics manufacturers, industrial machinery makers and fashion brands working on shifting some of their assembly lines.

Those that are moving aren't flocking to the United States. Instead, they're looking to transfer work to other Asian countries such as Cambodia and Vietnam, where the tariffs don't apply and labor is cheap.

GoPro (GPRO) did not specify where it would shift production.

Another tariff hike on $200 billion of Chinese goods was supposed to go into effect on January 1, but has been punted for three months after President Donald Trump and his Chinese counterpart, Xi Jinping, struck a truce.

GoPro, which is based in California, previously signaled that it was considering a proactive move to avoid potential tariffs.

"We're fortunate that we have a very focused product line and we have manufacturing partners that already have some facilities outside of China," CEO Nick Woodman told CNN Business in September.

GoPro's operations in China aren't big enough on their own to make the country's government worry. But analysts said the trend could unsettle Beijing.

"If a company like Foxconn moved even symbolic production to a country like Vietnam, that would be an earthquake for China," said Christopher Balding, a China expert at the Fulbright University Vietnam.

"I do take this as more proof of the move out of China," he added.

GoPro's stock has declined 94% from its peak in 2014. The company is downplaying the cost of its move out of China.

"We own our own production equipment while our manufacturing partner provides the facilities, so we expect to make this move at a relatively low cost," said McGee.

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