Microsoft and Dell ask Chinese manufacturers to strengthen PC production lines in response to last-minute demand ahead of Trump administration's tariff hikes

President-elect Donald Trump has announced that he will impose an additional 10% tariff on imports from China due to the influx of illegal drugs such as narcotics. In response to this, major PC manufacturers Microsoft, Dell, and HP have reportedly already asked their Chinese manufacturing partners to maximize production in November and December 2024.

Microsoft, HP and Dell ramp up China parts output before Trump's return - Nikkei Asia
https://asia.nikkei.com/Spotlight/Supply-Chain/Microsoft-HP-and-Dell-ramp-up-China-parts-output-before-Trump-s-return

Leading PC makers ask Chinese partners to up production before Trump takes office | Tom's Hardware
https://www.tomshardware.com/tech-industry/leading-pc-makers-ask-chinese-partners-to-up-production-before-trump-takes-office

According to reports, Microsoft is asking suppliers to increase production of cloud server parts in November and December to avoid tariffs. In addition, the company is also planning to move assembly of Xbox and Surface out of China. Since it is not possible to relocate production bases in a short period of time, the company aims to produce as many of these devices as possible outside of China by the end of 2025.

Dell already produces some products in Vietnam, but is looking to diversify production across Southeast Asia to further reduce geopolitical risk.

HP has one of its major suppliers leasing a factory in Thailand ready to begin production immediately, while other partners are building new warehouses and production facilities for HP in Thailand with more planned. Both Dell and HP are reviewing their sourcing plans through 2025 with the aim of significantly reducing the use of Chinese-made parts in their desktop and laptop PCs.

As an industry-wide trend, many major electronics component suppliers have been relocating production out of China in recent years to mitigate geopolitical risks. While this strategy itself is not directly related to Trump's return to power, the announcement of new tariffs has accelerated the move.

Since Trump's election victory, contract manufacturers have also increased production of almost all types of parts, including mechanical parts, passive components, and printed circuit boards, to ensure compliance with regulations and tariff requirements due to concerns about 'country of origin fraud,' which Trump mentioned during the election campaign.