(Bloomberg) -- Intel Corp. is considering moving part of its global supply chain away from China amid that country’s trade war with the U.S., Chief Executive Officer Bob Swan said Sunday.
Intel doesn’t believe tariffs are an “effective way to drive global trade,” Swan said, and is encouraging the governments to engage in constructive dialogue -- even as Intel tries to mitigate the impact of the dispute. Asked if those efforts could entail revamping the company’s supply chain, Swan said “absolutely,” without elaborating.
“How do we move goods -- sometimes our customers will move their operations -- and how do we work the global supply chain so less product is coming directly from China to the U.S. that would be subject to tariffs?” Swan said in an interview with Bloomberg TV in Tel Aviv.
Behind the trade war is President Donald Trump’s position that China and other trading partners are taking advantage of the U.S. For more than a year he has ratcheted up taxes on imports and encouraged U.S. companies to move production back home.
Uncertain Future
Uncertainty as U.S.-China trade negotiations enter a crucial stage is weighing on companies like Intel, as are signals from the Chinese government that it might not implement major stimulus measures -- as it has done in the past -- if the economy struggles. Intel already cut its revenue forecast for the full year, citing “China headwinds.”
Apple Inc. has a backup plan if the trade war with China keeps escalating: Say goodbye to Beijing. Taiwan-based Foxconn Technology Group, Apple’s primary manufacturing partner, said it has enough capacity to make all iPhones bound for America outside of China.
Alphabet Inc.’s Google is reportedly moving some production of Nest thermostats and server hardware out of China, avoiding U.S. tariffs and an increasingly hostile government in Beijing. It has already reportedly shifted much of its production of U.S.-bound motherboards to Taiwan, according to people familiar with the matter.
The migration is taking place as both foreign and domestic companies seek to pivot production away from China amid Trump’s efforts to reset the parameters for global trade and manufacturing. Beijing is also showing growing signs of clamping down on American corporations, from Ford Motor Co. to FedEx Corp., within the world’s largest consumer market and production base.
--With assistance from Giovanni Prati.
To contact the reporter on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net
To contact the editors responsible for this story: Riad Hamade at rhamade@bloomberg.net, Amy Teibel, Michael S. Arnold
©2019 Bloomberg L.P.
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