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20 October
Sunday

Asia

Google runs from China

The company has already transferred most of the production of motherboards in Taiwan

Photo: AP

/NOVOSTIVL/ Alphabet’s Google is moving some production of Nest thermostats and server hardware out of China, avoiding punitive US tariffs and an increasingly hostile government in Beijing, according to people familiar with the matter. This article appeared in the South China Morning Post.

Google has already shifted much of its production of US-bound motherboards to Taiwan, averting a 25% tariff, said the people, asking not to be identified discussing internal matters. While US officials have pinpointed Chinese-made motherboards as a security risk, Google did not bring that up during discussions with its suppliers, they said. Tariffs have also pushed American-bound production of its Nest devices to Taiwan and Malaysia, the people said.

The migration is taking place as companies both foreign and domestic seek to pivot their production away from China amid US President Donald Trump’s efforts to reset the perimeters for global trade and manufacturing. Beijing is showing growing signs also of clamping down on American corporations from Ford Motor Co. to FedEx Corp. within the world’s largest consumer market and production base.

While Google’s hardware production in China pales in comparison to the likes of Apple, its shift may herald a broader trend as tensions between Beijing and Washington escalate. The US search giant earns some advertising revenue from the country and had explored avenues to court consumers and corporations in the world’s No. 2 economy, from sharing artificial intelligence tools to even a censored search service. It is also lobbying Washington for permission to continue supplying Android to Huawei Technologies Co., the Financial Times has reported.

Among the Google hardware saddled with higher tariffs, server motherboards are among the most critical to the tech giant’s operations. The company builds its own data centers in the US and elsewhere. Those computing hubs help it offer search and productivity tools on a cloud services platform, and power the world’s largest mobile platform as well as services from mapping to search.

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