Proving the Business Case for the Internet of Things

Fitbit pulls manufacturing out of China

Steve Rogerson
October 15, 2019



As the China-USA trade war escalates, wearable health company Fitbit has announced it is moving all its manufacturing out of China by the end of this year.
 
Fitbit says 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.
 
Section 301 of the US Trade Act authorises the president to take appropriate action, including retaliation, to obtain the removal of any act, policy or practice of a foreign government that violates an international trade agreement or is unjustified, unreasonable or discriminatory, and that burdens or restricts US commerce. Donald Trump has been using this to impose tariffs on China as part of the trade war.
 
Despite ongoing talks to try to broker a new trade deal between the countries, Fitbit has decided to act.
 
“In 2018, in response to the ongoing threat of tariffs, we began exploring potential alternatives to China,” said Ron Kisling, CFO of Fitbit. “As a result of these explorations, we have made changes to our supply chain and manufacturing operations and have additional changes underway. Based on these changes, we expect that effectively all trackers and smartwatches starting in January 2020 will not be of Chinese origin.”
 
The company says it will provide more details of the financial implications of these tariff mitigation efforts.
 
Fitbit helps people lead healthier, more active lives by empowering them with data, inspiration and guidance to reach their goals. Fitbit designs products and experiences that track and provide motivation for everyday health and fitness.