September 6, 2019
According to an article by the Business Standard Canon is conducting feasibility studies across 40 countries to way up options for moving its production out of China to avoid tariffs set by President Trump.
After the fourth round of tariffs were announced by President Trump, China announced more of its own tariffs against US products imported into China, which in turn lead President Trump to retaliate with an additional 5 percent on tariffs.
A statement released last month by the United States Representative (USTR), responding to China’s decision to impose tariffs on US products said: “President Trump has instructed the United States Trade Representative (USTR) to increase by five percent the tariffs on approximately $550 billion (€496 billion) worth of Chinese imports. For the 25 percent tariffs on approximately $250 billion (€225 billion) worth of Chinese imports, USTR will begin the process of increasing the tariff rate to 30 percent, effective 1 October following a notice and comment period.”
For the 10 percent tariffs on approximately $300 billion (€270 billion) worth of Chinese imports that the President announced earlier this month, the tariffs will now be 15 percent, effective on the already scheduled dates for tariff increases on these imports.
Kazutada Kobayashi, Advisory Director of Canon told Business Standard: “We are conducting feasibility studies across the world in about 40 countries and are ready to set up new factories in some countries because US-China relations might affect production or business; so we always need to be prepared.”
Kobayashi added: “The timing of establishing new factories cannot be ascertained and is very unforeseeable. Any emerging thing may happen or there may be a new domain that we may step into.”
Kobayashi told Business Standard that the production will be placed across the world so the risk levels will be lowered, however short term it might just be a question of the OEM switching production of certain models from China to its plants in the Philippines or Thailand.
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