HP Joins Apple in Manufacturing Shift to Avoid Tariffs
HP is taking a page from Apple’s playbook, moving its manufacturing operations out of China to dodge incoming U.S. tariffs. With former President Donald Trump pushing for an additional 10% tariff on Chinese imports, the PC giant is acting fast to restructure its supply chain. By the end of October, HP expects that 90% of its North America-focused products will no longer be made in China.
What’s Happening & Why This Matters
HP’s strategy mirrors moves by leading tech companies seeking to reduce reliance on China due to ongoing trade tensions. HP CEO Enrique Lores revealed in an earnings call that the company has spent years preparing for manufacturing changes to maintain production stability. By the end of fiscal 2025, he stated that nearly all HP devices sold in North America will be produced outside of China.
Although HP has not disclosed where its new manufacturing centers will be, Lores mentioned an expansion into multiple countries to diversify supply. While transitioning from China, the company still keeps some production within the country for products sold outside North America.
One challenge HP faces is the potential for higher consumer prices. As the company transitions its supply chain, short-term costs may rise, which could be passed on to customers. Additionally, Trump’s proposed tariffs extend beyond general Chinese imports and target foreign-made semiconductors. This could impact chip suppliers like TSMC, which manufactures processors for AMD, Qualcomm, and Nvidia.
HP isn’t the only company pivoting to avoid higher tariffs. PC makers Acer and ASRock are also relocating their manufacturing operations to Vietnam and Taiwan. However, unlike HP, Acer is already planning to introduce a 10% price hike on Chinese-assembled laptops in the U.S., potentially signaling higher costs across the industry.
TF Summary: What’s Next
HP’s decision reflects the shifting trade dynamics between the U.S. and China. The ongoing tariff debate is forcing tech companies to rethink global supply chain strategies, with some opting to relocate production while others adjust pricing models. If tariffs on semiconductors move forward, manufacturers may need to adjust pricing and sourcing strategies even further.
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