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GoPRo Moves Out Of China Amid Tariff Worries

GoPro Chief Executive officer and founder Nick Woodman announced the company’s plans to move the production of cameras from its facilities in China. The company would stop the production of cameras in China from coming summer. However, the production would be halted only for the cameras that are being manufactured for the US market. It would however continue to manufacture cameras in China for markets other than the US.

The GoPro’s decision comes in the wake the ongoing trade tariff feud between China and the US. It is believed that the company’s decision to move out of China is taken to protect its interest and to prevent getting caught amid the ongoing trade war.

Following the announcement, GoPro’s shares took a beating and went down by 1% during the intraday trading.

CFO and Exe Vice President of GoPro, Brian McGee said that given the geopolitical uncertainties in today’s business environment, one needs to be alert and agile. The need of the hour is to take proactive decisions in the long term interest of the company. The decision to shift the production of US bound cameras outside China is taken to avoid the implications of tariff. Using a diversified production approach will be advantageous for the business, irrespective of the likely implications of the tariff.

Over the past few months, tensions have escalated between US and China with each raising tariffs on products from the other. However, on December 1, 2018, leaders of both the countries agreed to bring the trade war to a pause for 90 day period.

McCee further said that all the production equipment used for manufacturing cameras is owned by GoPro and only the facilities of the Chinese counterpart is being used for manufacturing the cameras. Therefore, expenses to be incurred for shifting out of China would be relatively lower.