Caixin
Caixin Global – Latest China News & Headlines

Home >

ABOUT US

CX Tech is Caixin Global's real-time tech news portal, featuring 24-hour news, short-form analysis, and roundups from business and tech media in China.

TRENDING
Chinese Robot Startup Unitree Gears Up for Market Debut
LATEST
Chinese Robot Startup Unitree Gears Up for Market Debut
China Enforces AI Content Labeling Rules to Curb Misuse
Tech Brief (Sept. 2): China Rolls Out Mandatory AI Labeling
Meituan Enters Open-Source AI Race With LongCat Model
Tech Brief (Aug. 29): SenseTime Reports Strong AI Growth
All Hail the Driverless Taxis as China Eyes a $183 Billion Market
Tech Brief (Aug. 27): Cambricon Reports $128 Million Profit, Stock More Than Doubles Since July
Tech Brief (Aug. 26): Musk’s xAI Sues Apple and OpenAI Over Alleged AI Market Monopoly
Exclusive: NetEase’s Youdao CEO Explains How AI Agents Could Build a Future of Virtual Teachers
Ant Group Teams up With Top Beijing Hospital to Launch AI Healthcare Lab
Didi and Meituan Clash in Brazil as Food Delivery Battle Goes to Court
Google Denies Rumors It Is Resuming Full Services on Chinese Mainland
China Proves a Winner in the Gaming Market as Growth Hits a Five-Year High
China’s Booster Robotics Lands New Funding as it Hits a Winning Streak
Amazon to Shut Down Shanghai AI Lab Amid Strategic Shift
Cover Story: A New Gold Rush Begins in China’s Hard Tech Sector
Humanoid Robotics Startup Robot Era Secures $69 Million Series A Funding
China’s Zhipu AI Secures $140 Million Investment From Shanghai State Funds Amid IPO Push
In Depth: AI Agents Trigger the Next Tech Battlefield in China
Cover Story: Alibaba Fights Tencent for Dominance Over AI in China
Puma Feels Trade Heat as Sportswear Makers Retreat From China

By Bloomberg / Aug 01, 2019 06:39 AM / Business & Tech

Photo: Bloomberg

Photo: Bloomberg

Germany’s Puma SE is feeling the heat from the U.S.-China trade war even before President Donald Trump’s proposed tariffs hit the sportswear sector.

In a bid to insulate itself, Puma is accelerating a shift of footwear and apparel production out of China and into countries like Vietnam, Bangladesh and Cambodia. As other manufacturers do the same, the new supply hubs are getting more crowded. That’s driving up costs for everything from factories to shoe components to packaging, Puma Chief Executive Officer Bjorn Gulden said.

“I can’t quantify what that is, because I don’t think there’s a number for it, but it’s just a fact,” Gulden said Wednesday on a call with reporters after the release of quarterly results.

Trump has threatened tariffs as high as 25% on footwear, and the stampede of shoe and apparel production out of China has forced Puma to lock in capacity at facilities in hubs like Vietnam earlier than usual, Gulden said. As a result, the Herzogenaurach, Germany-based company is carrying about 7% more inventory than it normally would.

In May, Puma signed an open letter to Trump — along with Nike Inc., Adidas AG and other footwear companies — saying that tariffs on shoes made in China would be “catastrophic for our consumers, our companies and the American economy as a whole.”

Representatives of Adidas and Nike didn’t immediately respond to requests for comment.

The price impact will probably vary regionally, Gulden said. Chinese consumers are shielded, because the factories that once churned out products for the world increasingly serve domestic customers’ needs. But U.S. consumers could see the tariff costs in clothing prices.

“You can’t move all production out of China, and therefore there will be a price increase in the market that will be visible for the consumer,” Gulden said.


Share this article
Open WeChat and scan the QR code