HP, Dell Take Different Early Paths to Tackle Tariffs — Panjiva
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HP, Dell Take Different Early Paths to Tackle Tariffs

China 1882 Info Tech - Tech Hardware 412 Tariffs 1279 U.S. 3509 Vietnam 180

Laptop manufacturers including Dell and HP Inc. are finalizing plans to move some of their laptop computer manufacturing out of China, Nikkei reports.

While the report is based on anonymous sources rather than formal company announcements it would not be a surprise to see preemptive plans being made. U.S. duties on Chinese laptop exports have yet to be applied, as outlined in Panjiva’s 3Q 2019 Outlook, but could rapidly be brought into place based on prior Trump administration practice.

China accounted for 91.4% of U.S. laptop computer imports by number in the 12 months to May 31, Panjiva data shows. While there was a 2.0% reduction in imports from China in 2018 compared to 2017, there’s been a 11.1% year over year surge in May – perhaps indicating a small pre-tariff stockpiling. There’s been an acceleration in exports from Vietnam, though they only represented 6.0% of shipments in the 12 months to May 31. 

LAPTOP IMPORTS RELY ON CHINA, EVIDENCE OF ACCELERATING GROWTH

Chart segments U.S. laptop imports by origin.  Source: Panjiva

Looking at HP and Dell specifically they imported 100% and 88.7% of their U.S. seaborne imports of laptops from China in the 12 months to Jun. 30. Dell has already begun to replace imports from China – supplied by Wistron and Compal – with those from Taiwan (by Compal) since the start of 2019. 

HP meanwhile, which is supplied by Quanta’s Tech Front subsidiary, has yet to do so. Indeed, HP Inc. has accelerated its shipments recently with a 14.2% year over year increase in the second quarter. That may reflect increased demand and / or inventory front-loading which is a common early-stage strategy for dealing with the risk of tariffs.

DELL HEADS AWAY FROM CHINA, HP STARTS STOCKPILING

Chart segments U.S. seaborne imports of laptop computers by consignee and location for Dell and HP IncSource: Panjiva

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