The bitter trade war between China and the US has been happening for over a year. Both countries have imposed tariffs on each other billions of dollars’ worth goods. Consequently, increasing tariffs continue to cut off their profits. Resulting in some Asia companies are moving home to produce their goods.
This trend is most prevalent in the capital machinery and electronics sector in Japan and Taiwan. These companies are moving home to avoid higher US’s tariffs on imports from China.
Factories Moving Home
Cited from South China Morning Post report in February this year, china’s Ministry of Economic Affairs mentioned here are around 40 Taiwanese companies are looking to shift their factories back home.
To support the situation, Taiwan’s government has also promoted ‘Invest Taiwan’ initiative. The government aims to attract more companies back home. With the program, companies can apply for low-cost loans to cover the costs of relocation.
Consequently, many Taiwanese companies are moving home. For instance, Taiwanese circuit boards maker, Flexium, and Quanta computers have moved home.
Besides Taiwanese companies, SK Hynix, the world’s second-largest chipmaker, is also looking to move the production of certain chips modules back to its home country, South Korea.
Read also: Can President Trump Pull US Companies Out of China?
As for Japanese companies, many of them are also moving their production home. As the example, Mitsubishi Electronic is currently shifting production from its manufacturing base in Dalian, China to Nagoya, Japan. Besides, Machine-makers Toshiba Machine and Komatsu are also planning similar moves.
Companies like Dell, that were already concerned about rising labor costs in China since the beginning of the war is also taking the opportunity. Most of them accelerate the move of their factories away from China.
US and Taiwanese companies make up more than half of the companies relocating production from China.
