HP speeds towards China exit as tariffs bite

Published: Thursday, May 29, 2025 at 11:28 am

HP Speeds Up China Exit Amidst Tariff Troubles

HP Inc. is rapidly pulling out of China, accelerating its plans to avoid the impact of US tariffs. This move, revealed during the company's Q2 2025 earnings call, highlights the ongoing challenges faced by tech giants due to trade tensions.

According to HP's CEO, Enrique Lores, the company is "accelerating" its shift to have almost zero products shipped from China to the US by June. This is a significant advancement from their previous goal of less than 10% by September. To achieve this, HP is relocating its manufacturing operations to Southeast Asia, Mexico, and to a lesser extent, the US.

The company is also taking further steps to mitigate tariff costs. HP will no longer use the US as a distribution hub for products destined for Canada and Latin America. These actions are in response to higher-than-expected tariff increases announced in April.

While HP reported a 3.3% year-on-year increase in net revenue for Q2 2025, reaching $13.2 billion, earnings per share (EPS) fell below expectations. CFO Karen Parkhill noted the company is facing a "very different economic situation" and has implemented "price actions," meaning price increases across PC and printing hardware. HP expects to fully offset the costs of tariffs by Q4 through these mitigation strategies.

This decision by HP underscores the broader impact of trade policies on the tech industry. Other companies, like Framework and Razer, are halting laptop sales due to tariffs, and PC makers are exploring manufacturing plants in Saudi Arabia.

BNN's Perspective:

While the shift away from China is understandable given the economic pressures, it's a complex situation. On one hand, it demonstrates the agility of large corporations to adapt to changing global dynamics. On the other, it raises concerns about potential price increases for consumers and the overall stability of the PC hardware market. The long-term effects of these trade policies on global supply chains remain to be seen.

Keywords:

HP, China, tariffs, US tariffs, manufacturing, supply chain, Enrique Lores, Karen Parkhill, price increases, PC hardware, trade, Southeast Asia, Mexico, earnings, revenue, exit China, technology, business, economics

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