Mexico: Chinese tech companies move their production from the US to avoid tariffs and to benefit from cheaper labour costs

Author: Latin America Reports, Published on: 24 May 2019

“Latin American technology production appears to benefit from trade war”, 18th May 2019

…At least four Chinese companies have invested in Mexico’s border city of Tijuana since the start of this year…Allured by Mexico’s proximity to Silicon Valley and a plethora of developers who are willing to work across Latin America for smaller wages than their U.S. counterparts, international investors in the region are bound to increase their involvement, primarily in the natural resource and technology sectors. It has long been known that China is increasingly interested in Latin America…Although representatives for Apple, Google and other leading tech giants have called out the U.S. government’s move for slapping China with more tariffs, suggesting that the result of a trade war is ‘mutually destructive’,  this may have been to the benefit to Latin American players. A number of Chinese manufacturers have decided to move their business to Mexico in an attempt to out-maneuver a number of new restrictions imposed by the United States…The…electronics company, Hisense Co…hoped the move to Mexico would open their sales market due to cheaper shipping costs than those from China… [S]lowing economic growth in China has also led some companies to seek other emerging markets where labor costs remain relatively low. Sports camera company GoPro have also announced plans to move to Mexico to avoid tariffs…

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Related companies: Apple Google (part of Alphabet) GoPro Inc. Hisense Co.