Leading PC makers ask Chinese partners to up production before Trump takes office

After Donald Trump announced plans to slap a 10% tariff on Chinese imports, leading PC makers Dell, HP, and Microsoft decided to prepare and asked their manufacturing partners in China to maximize their output in November and December to lower costs and mitigate potential disruptions, reports Nikkei. The longer-term plan of all three companies (and the industry at large) is to transfer production from China to other countries. 

“We have been in meetings with several U.S. clients, and they are all eager to know whether we can further accelerate our plan to have meaningful production outside of China,” one electronics component maker that supplies Apple, HP, and Microsoft told Nikkei. 

Virtually all leading electronics suppliers have been shifting their production away from China in recent years to reduce their geopolitical risks. Hence, the strategy has nothing to do with Trump returning to power. However, with a 10% tariff on Chinese imports and 25% on goods from Mexico and Canada announced on Trump’s first day in office, the tech giants are taking swift action. 

Since plenty of components and assembly are done in China, Dell, HP, and Microsoft asked their suppliers in the People’s Republic to maximize their production in November and December so they could ship these goods either to the U.S. or warehouses in other countries to avoid paying tariffs. 

Dell, which already produces some goods in Vietnam, is exploring further diversification within Southeast Asia to reduce geopolitical risks. For HP, one partner has rented a factory in Thailand to immediately begin production for the major client. Others have built new warehouses and production facilities in Thailand for HP, and more are under construction. Both Dell and HP aim to sharply reduce their use of Chinese-made parts in desktops and laptops and are currently reassessing procurement plans through 2025. 

Microsoft is also pushing suppliers to increase cloud server component production in November and December to avoid tariffs. The company also plans to relocate the assembly of Xbox consoles and Surface laptops outside China. Since it is impossible to move production from one facility to another overnight, the company reportedly aims to produce as many of these devices as possible outside of China by the end of 2025.

In addition, contract electronics manufacturers have been preemptively increasing output since Trump’s election victory, which includes pretty much all types of components, such as mechanical parts, passive components, and PCBs. Concerns over ‘origin laundering’ mentioned by Trump during the campaign have added urgency, so companies are striving to meet regulatory and tariff requirements.