Instead of waiting for a resolution to the ongoing U.S.-China trade war, companies are pulling their supply chains out of China entirely, BlackRock Chair and CEO Larry Fink said Friday on CNBC.
“We’re hearing from CEOs that more and more supply chains are moving out of China right now,” Fink said on the news outlet’s “Squawk Box” program. “People are not waiting, companies are not waiting to see what the outcome is.”
The tit-for-tat tariffs fight between the world’s two largest economies has been waging for well over a year now, and businesses are tired of the uncertainty in waiting for a resolution.
U.S. President Donald Trump has levied 25% tariffs on $200 billion worth of Chinese imports, and has threatened to slap duties on another $325 billion worth if Chinese imports — basically everything China exports to the U.S. outside of rare earths, which China has a global monopoly on.
There are reportedly more than 50 multinational corporations, including Apple, Nintendo and Dell, moving production out of the country to avoid Trump’s tariffs, which lead to cost increases passed on to U.S. consumers.
Many of the companies are moving to Vietnam. Berkshire Hathaway subsidiary Brooks Running said in May it would be “predominantly in Vietnam by the end of the year, moving about 8,000 jobs out of China at the same time the country’s economy is slowing. Beijing reported 6.2% growth during the second quarter, which is still double the United States’ 3.1% growth during the same period. However, that is China’s slowest rate of growth in the last 27 years.
Numbers released last week showed China’s June exports fell 1.3% year over year because of Trump’s tariffs.
“I do believe the trend in China continues to be downward, ” Fink said. “I think long term, China knows they need to find ways to stimulate more of their domestic economy.”
Fink’s BlackRock is an American global investment management company in New York City. Founded in 1988, it is the world’s largest money manager with about $6.5 trillion worth of assets under management.