HP speeds towards China exit as tariffs bite

Date:
Thu, 29 May 2025 11:28:00 +0000

Description:
"Almost no" China-made HP products will be heading to the US soon.

FULL STORY

HP Inc has revealed it is nearly done with its exit from China as the Trump administration tariffs continue to affect even the biggest companies.

Speaking on its latest Q2 2025 earnings call , company president and CEO Enrique Lores said it has "accelerated" its move to have zero products
heading to the US, made in China.

HP Inc had said it would make such a move last quarter, and now seems close
to ensuring it fully complies with the increasing punitive tariffs.

HP exiting China

A quarter ago, we shared that our goal was to have less than ten percent of
the products in North America being shipped from China by September, Lores
said on the call.

We have accelerated that and we share that now almost no products will be coming from China sold in the US by June. Its a very significant acceleration of the plan that we have."

We accelerated the shift of factories out from China into Southeast Asia,
into Mexico to a certain extent in the US to mitigate the impact of the
change, he added.

Lores also revealed that in order to avoid further tariffs, HP will also no longer use the US as a distribution hub for products sold in Canada or to
Latin America.

The company revealed $13.2 billion net revenue for Q2 2025, up 3.3% year on year, however EPS (earnings per share) fell from $061 to $042 - below the company's outlook.

Lores noted the company was in, "a very different economic situation from
where we were a few months ago in terms of both consumer and business confidence," forcing it to take what he called "price actions", effectively increases across PC and printing hardware.

In light of the increased macroeconomic uncertainty, we have adjusted our outlook to reflect moderated demand and the net impact of trade-related
costs, Karen Parkhill, CFO, HP Inc, said, adding the company was, "executing targeted mitigation strategies, and assuming current conditions remain, we expect to fully offset these costs by Q4.

She noted HP had, worked aggressively to respond to changes in the regulatory trade environment however, tariff increases announced in April were higher
than expected."

The full benefit of these mitigating actions can take a few months lead time depending on the scope, Parkhill added.

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Link to news story: https://www.techradar.com/pro/hp-speeds-towards-china-exit-as-tariffs-bite

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