Google moves production of its Nest devices out of China
According to Bloomberg, some sources state that Google is beginning to move the production of its Nest devices and the hardware with which it equips its data centers outside of China to avoid the increase in rates, which are currently able to reach up to 25%.
Production of motherboards for Google's data centers in the United States have just moved to Taiwan, while Nest devices will be produced in two new plants, one in Taiwan and one in Malaysia. There is little to add on this subject, but we know that this is a move linked to the growing tensions created by the ongoing trade war between the United States and China.
The relocation of production to new geographical areas obviously has only one purpose, which is to allow Google to avoid spending more cash than is necessary in the future. Indeed, such tariffs are immediately absorbed by society, or, in the worst case scenario, passed on to consumers in the form of higher prices.
Google is certainly not the first or last American company that has decided to move production from China to other countries, but certainly, when a company of the caliber of Big G undertakes such a move, you feel its a completely different situation.
Among other known names there is also GoPro, of which we know is currently moving the production of its products for the United States market to Mexico. Yesterday, Foxconn also said it is ready to move production of iPhones for the U.S. outside of China before the new rates, expected to kick in at the end of June 2019, are applied.
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Forcing to relocate your manufacturing operations due to tariffs is not going to solve things, it's either going to increase the cost of production anyways (that will be passed on to the consumer) OR not be able to keep the amount of products available to meet demand. 🤷🏼♂️
From what I've read elsewhere the capacity is the problem. China has been more expensive than other parts of the world for years so prices will come down by relocating. But Shenzen (in particular) has so much infrastructure that nowhere else in the world can match its manufacturing capacity.