GoPro Shares Will Move Most US-Bound Production Out Of China

As the arrest of Huawei CFO Meng Wanzhou threatens to unravel the tenuous trade truce between the US and China, one American company isn't sticking around to find out whether a more permanent solution to the trade war can be hammered out by the March "hard deadline."

GoPro revealed Monday morning that it would move production of most of its cameras bound for the US market out of China by the summer of 2019 to "mitigate the impact" of its products being hit by US tariffs - a sign the company expects President Trump to move ahead with imposing tariffs on some $200 billion in Chinese goods early next year. 

According to a company press releaseGoPro believes that a "diversified" approach to manufacturing could benefit its business regardless of whether more tariffs are implemented. GoPro added that, since it uses production facilities provided by a local partner, it expects to make this move "at a relatively low cost."

GoPro today announced that it plans to move most of its US-bound camera production out of China by the summer of 2019 to mitigate the potential impact of inclusion on any new tariff lists. International-bound camera production will remain in China.  

"Today's geopolitical business environment requires agility, and we're proactively addressing tariff concerns by moving most of our US-bound camera production out of China," said Brian McGee, Executive Vice President and CFO of GoPro. "We believe this diversified approach to production can benefit our business regardless of tariff implications."

McGee added, "It's important to note that we own our own production equipment while our manufacturing partner provides the facilities, so we expect to make this move at a relatively low cost."

So, GoPro will continue manufacturing cameras for the Chinese market in China, while building cameras for the US market in the US. If anything, this would appear to validate Trump's argument that tariffs would lead to more domestically consumed products being manufacturing within the US. GoPro shares traded 2% higher in premarket trading on the news.

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Gary Anderson 11 months ago Contributor's comment

This will be great until GoPro ends up losing billions of potential Asian customers just to gain a few hundred million potntial US customers.