Microsoft, HP, and Dell Stockpile Electronic Components From China Ahead of Trump’s Return

President-elect Donald Trump seems to be unafraid to use tariffs to penalize imported products and protect domestic industries. During his presidential campaign, he announced plans to eliminate the CHIPS and Science Act established under the Biden administration. Instead, he intends to use tariffs to compel companies to manufacture chips within the U.S.

However, his recent statements suggest that his strategy goes beyond merely applying tariffs on semiconductors from abroad. Trump appears determined to impose tariffs on any products coming from China. This has raised concerns among tech companies. Many of them rely heavily on manufacturing a significant portion of their products in the Asian country, making Trump’s promises particularly alarming.

Tech Companies Are Preparing for Increased Tariffs

With Trump set to return to the White House on Jan. 20, companies such as Microsoft, HP, and Dell are taking his statements seriously. They expect that the president-elect will impose substantial tariffs on much, if not all, of the products imported from China. As a result, these entities have significantly ramped up their production and are said to be stockpiling Chinese electronic parts.

A spokesperson for a Chinese manufacturer told Nikkei that some of its U.S. customers have urged the company to accelerate its plans to set up a big part of its production outside of China. This approach seems to be the most effective strategy for handling impending tariffs.

On Monday, Trump said that one of his first actions upon taking office again would be to impose an additional 10% tariff on Chinese imports and a 25% tariff on products from Mexico and Canada. The announcement seems to have prompted many tech companies to stockpile electronic components from China before Jan. 20.

While these strategies may hurt China, they’re benefiting countries like Thailand, Vietnam, and other Southeast Asian nations. They’re now receiving much of the electronic component production that’s being redirected from China.Many expect the Trump administration to respond by auditing tech companies that export to the U.S., potentially leading to a tense standoff between his government and tech companies. The outcome still remains uncertain.

Image | Gage Skidmore

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