Larry Fink of BlackRock helps explain why…
Laurence Douglas Fink is the CEO and chairman of BlackRock. Based in New York City, it’s a U.S. global investment management corporation with over $6.5 trillion in assets.
On July 19, Fink appeared on “Squawk Box,” a morning talk program on CNBC that features interviews some of America’s biggest names in investments and politics. Fink is regarded as a powerful CEO in U.S. investment management.
While talking with “Squawk Box,” he said, “We’re hearing from CEOs that more and more supply chains are moving out of China right now. People are not waiting, companies are not wanting to see what the outcome is.”
To avoid high tariffs, U.S. corporations are slowly moving operations from China to neighboring manufacturing hubs like Vietnam, Malaysia, Taiwan, and India.
Corporations on the move include YETI Holdings, iRobot, Crocs, Cummins, CommScope, Zoom Telephonics, GoPro, and Apple. More are expected to follow.
China’s Feeling the Effects
American-owned corporations are pulling out of China because of the unknown outcome of the U.S.-China trade war.
In May, the U.S. increased trade tariffs for Chinese goods to 25% from the previous 10%. The increase in tariffs resulted after rounds of unsuccessful trade talks between the two countries.
Currently, China is experiencing the lowest economic growth rates they’ve seen for 27 years. That’s due to many factors, including the newly imposed tariffs and the impending uncertainty of the trade relationship between the U.S. and China.
Until the U.S.-China trade war is resolved, more U.S. corporations are expected to move operations to neighboring countries in Asia to avoid high export tariffs.
Will the U.S. and China come to an amicable trade agreement? Or will U.S. CEOs continue to move supply chains out of China altogether?
