Why Does Puma Shift Factories From China To Other Countries?

According to the world clothing and shoe net, since the US government announced on the previous day that it would impose additional tariffs on Chinese products of 100 billion US dollars, Germany

brand

(Puma) urgent measures have to be taken to deal with the trade war.

In April 24th, the chief executive of the brand, Bjorn Gulden, said in a conference call that the company is studying contingency plans to formally announce the announcement in the United States.

When products are subject to tariffs, some production activities are rapidly pferred from China to other Asian markets.

"Puma's business in China has been very strong, especially in 2018, when its first sales increase was more than expected.

But at present, 1/3 of PUMA's products are produced in China, and the United States will impose heavy taxes on them at any time. This has led us to shift production activities in China to other Asian countries, such as Vietnam, Indonesia, Kampuchea and Bangladesh, according to the objectives of the fashion sector.

Bjorn Gulden explains.

Earlier this month, US President Trump instructed us trade officials to impose additional duties on US $100 billion in Chinese imports, and said that this is a major measure taken by the White House to restore the US $50 billion import tariff to farmers and manufacturers in the United States.

This makes it possible for some fashion consumer goods such as clothing and footwear to be included in the tariff list.

"Our purchasing staff have been looking for alternative factories in the past two or three months," Puma chief executive Bjorn Gulden said at a press conference. "The pfer of production can take 12 months or even a month, and this will give many people a headache."

He also said that the US tariff policy is likely to cause Puma to eventually raise prices or accept lower profits.

However, since Puma is far from being the leader of the US market, they must wait until they see what the impact of Trump's policy on the market will take to ensure that they can still get enough profits.

Compared with competitors Nike and Adidas, Puma has a smaller scale, and compared with other competitors, Puma has less production.

In the past few years, due to the rising labor costs in China, Puma has shifted a small part of its production from China.

But if Trump hopes to bring more production lines back to the us through trade war with China, it may be wrong.

In this regard, Bjorn Gulden has also refuted the idea that higher tariffs may lead to increased US production.

The imposition of heavy tariffs on China is a serious violation of international trade rules, and Trump has been criticized by the world's major economic organizations including the Federal Reserve, World Trade Organization and IMF.

Given that Trump's attitude towards the policy is not very clear, it is not clear what he will do next, or whether he intends to relax tariffs.

But no matter what kind of way, for these brands that regard the Chinese market as an important place of origin, I am afraid that the next days will not be too good.

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