Trump trade war has caused these 3 consumer companies to aggressively rethink China
Executives at US consumer multinationals aren’t waiting for an end game on the Trump administration’s trade war with China.
They are picking up the nuts and bolts from their legacy China operations and moving to relatively smooth trade partners such as India and Thailand. The goal: Protect profits and protect the stock price by having a better “story” to pitch nervous investors scouring financial filings for outsized China supply chain exposure.
“Tariffs announced in April were higher and impacted more countries than we were expecting, and this clearly has impacted the operating profit that we had in the quarter,” HP Inc. (HPQ) Enrique Lores told Yahoo Finance. “We took actions fast to try to mitigate the cost increases. We accelerated supply chain changes. We redesigned our logistics network.”
The trade situation with China remains precarious at best, adding a persistent unease among execs who get paid big dollars to plan for the future.
Last month, the US temporarily lowered tariffs imposed on goods from China from 145% to 30%. China’s retaliatory tariffs on US goods dropped from 125% to 10%.
Trump accused China on Friday of violating the tariff truce, with China responded in kind this week by saying the US has also displayed wrongdoing. The Trump administration is also fighting the courts, as the US Court of International Trade ruled many of its tariffs were illegal last week. A separate court has temporarily paused that decision.
Read more: The latest news and updates on Trump’s tariffs
“I think what the administration is doing in terms of trade is experimenting,” Brookings Institution’s Ben Harris said on Yahoo Finance’s Opening Bid podcast (see video above). “It’s seeing how far it can push the US economy. It’s seeing how far it can push US consumers, and it’s seeing how far it can push our trading partners.”
Harris most recently served as assistant secretary for economic policy and chief economist at the US Treasury Department in the Biden administration.
Here are three well-known US consumer companies uprooting their China supply chains.
HP Inc.
HP — and the computer industry at large — has long relied on China to make cheap parts for computers and printers. Prices on computers and printers often deflate quickly due to frequent tech advancements, making it essential for manufacturers like HP, Dell (DELL), and Xerox (XRX) to keep production costs down.
But Trump’s trade war on China has sent HP off to rewire its supply chain. Here’s what HP CEO Enrique Lores recently told Yahoo Finance:
“We have moved production from China into Vietnam, Thailand, Mexico, some to India, and some to the US. What we did is accelerated the rebalancing that we had announced before. If you remember last quarter, we talked about having less than 10% of the product shipped to North America coming from China. At the end of September, we moved that up, and now by June, we expect almost no product coming to North America coming from China. So it’s a very significant change. We have also redesigned our logistics network to remove the US from products that were being sent to Canada or to Latin America.”
Read more: What Trump’s tariffs mean for the economy and your wallet
Gap
China has for decades been the center for apparel production. The country’s extensive manufacturing base has allowed clothing operators to profitably churn out high volumes of apparel and sneakers while not sacrificing too much on quality.
The trade war between the US and China is shifting that dynamic, albeit slowly.
To navigate the volatile trade backdrop, Gap is lowering its sourcing from China from less than 10% in 2024 to less than 3% exiting the year. By the end of 2026, no single country should account for more than 25% of its sourcing. The company is also doubling its vendor sourcing for American-grown cotton in 2026.
Gap (GAP) CEO Richard Dickson told Yahoo Finance: “Like any business, we’re constantly navigating complexity. And there’s a lot of complexities in running a business. And in this case, tariffs is a focus. But it’s our responsibility to do so without ever compromising the long-term integrity of our strategy.”
Logitech
Similar to HP Inc., Logitech (LOGI) has relied on China for years to make its computer mice and keyboards.
But by the end of 2025, the company plans for only about 10% of products sold in the US to be sourced from China. Currently, that level is 40%.
“We’re in the fortunate position that we have invested in a really diversified manufacturing footprint with China plus five other countries today,” Logitech CEO Johanna Faber told analysts on a late April earnings call. “So while I won’t say it’s easy to shift volume, our team is doing a fantastic job at shifting volume fast to mitigate tariff impacts.”
Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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