GoPro will pull production of some of its cameras out of China by summer 2019 in response to escalating trade tensions. The company said the move would affect most of its cameras intended for sale in the United States. Cameras bound for the inte jirnational market would still be produced in China.
“Today’s geopolitical business environment requires agility, and we’re proactively addressing tariff concerns by moving most of our U.S.-bound camera production out of China,” CFO Brian McGee said in a statement. “We believe this diversified approach to production can benefit our business regardless of tariff implications.”
GoPro shares were down more than 2% in early trading Monday.
In an interview in September with CNN, CEO Nick Woodman said he was “actively looking” to move some manufacturing outside China. Woodman said the trade war had been a “catalyst to get us thinking about our business in new ways.”
In its November earnings call, the company forecast fourth-quarter revenue would be below analysts’ estimates amid declining demand for its products. GoPro said it would be profitable in the fourth quarter and that “low channel inventory” would leave it well-positioned for the first quarter.
At the time, GoPro said it had the option to move U.S.-bound production out of China in the first half of 2019 if necessary. “It’s important to note that we own our own production equipment while our manufacturing partner provides the facilities, so we expect to make this move at a relatively low cost,” McGee said in the statement Monday.
At a meeting after the G20 summit in Buenos Aires, President Donald Trump and Chinese President Xi Jinping reportedly agreed to a halt in tariffs for 90 days, but global markets have faltered in the weeks since on concerns those negotiations were not going well.
The Trump administration has signaled that if talks are not completed by March 1, new tariffs would be implemented.