Giant has declared the "Made in China" era over in an interview with Bloomberg
. The statement came after it moved US bound production back to Taiwan as a response to Trump's tariffs.
The 25% tariffs have apparently added $100 on average to the price of bicycles made in China and shipped to the US. Giant, the world's largest bike company, closed one plant in China at the end of 2018 and will be working double shifts on its Taiwan plant to keep up with US orders.
“When Trump announced the plan of 25% tariffs, we took it seriously,” Chairwoman Bonnie Tu said in the interview at Giant’s Taiwanese headquarters. “We started moving before he shut his mouth... Last year, I noticed that the era of Made In China and supplying globally is over.”
The switch to Taiwan comes with higher employee costs, less automation and no China-like economies of scale. Tu declined to say how much it would cost Giant but simply told Bloomberg that their “bottom line would be better without the U.S.-China trade war.”
However, Giant seems to be weathering the storm and its ability to swerve the tariffs has been noticed by investors and analysts as its stock has climbed more than 70% this year to the highest level since 2015, after four straight years of declines. On Monday alone, its shares soared 9.8%, their biggest gain ever, after the company said it expects a quarter of its revenue this year to come from e-bikes.
Giant still has five Chinese plants and Tu confirmed that if the tariffs are lifted, they would move production back right away. In the meantime, Giant is opening a plant in Hungary and is looking for a new South East Asian manufacturing location.