Categories Retail, U.S. Markets News

GoPro to move camera production out of China due to tariffs

GoPro Inc. (GPRO) is planning to move some of its camera production out of China to avoid new tariffs. Although the company did not specify a location, it is looking to shift most of the production of its US-bound cameras from China to another country by the summer of 2019.

The company views this as a proactive move to help spread out its manufacturing activities in order to ease pressures from the trade war and potential tariffs. GoPro does not expect the shift to cost much as the company has its own production equipment and the facilities will be provided by its manufacturing partners.

GoPro will continue to produce cameras bound for other locations in China. Several companies are looking at shifting production locations due to the ongoing trade tensions and tariffs but these firms are not coming back to the US. Instead they are opting for countries in Southeast Asia where there are no tariffs and the cost of labor is less.

GoPro’s stock sinks 7% despite Q3 results beat

The proposed round of tariffs on $200 billion of Chinese products, set to take effect from January 1, 2019, was postponed after the US and China called a trade truce earlier this month. GoPro has been dealing with rising competition and slowing demand for its products for some time but the company expects to generate profits in the fourth quarter.

Earlier this month, GoPro said it saw strong sell-through for all three of its HERO7 camera models during Black Friday and Cyber Monday, with the HERO7 Black being the top-seller. The company is optimistic on its HERO7 line as it heads into the December holiday season.

GoPro’s shares have fallen 35% so far this year and over the past one month, the stock has dropped 10%. The stock was up 0.20% in premarket trade on Tuesday.

 

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