Fitbit China Manufacturing

Fitbit Diversifies its Supply Chain Outside of China

On Nov. 6, 2019, Fitbit, which is about to be acquired by Google for $2.9 billion, announced that it has undertaken a plan to shift its manufacturing operations outside of China for effectively all of its trackers and smartwatches. 

As a result, starting in January 2020, the company expects those products will no longer be of Chinese origin and therefore not subject to Section 301 tariffs.

301 tariffs were the result of the U.S. Trade Representative’s Section 301 investigation that determined China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation were unreasonable and discriminatory. As of May 10, 2019, a 25 percent tariff was implemented by President Trump, up from 10 percent. The tariffs are affecting numerous companies. 

Foreign Trade Zones (FTZ) have benefitted many companies in industries including alcohol, apparel, autos, electronics, raw materials, Pharma, energy, textiles, and tobacco. Benefits of utilizing FTZ include improving cash flow through duty deferral, duty reductions for manufacturers, tax exemptions, and duty elimination through avoiding drawbacks.

The future is uncertain as to when these tariffs may be lifted. Until then, Tri-Link can help companies mitigate their loses through the use of Foreign Trade Zones.

It is strategies like these that make clients reach out to Tri-Link help and expertise in the import/export trade. Our experience also includes all aspects of warehousing and transportation such as air, ocean, rail and truck carriers. 

To discuss how an FTZ can benefit your company contact us.

Published on November 8, 2019