Tech

Fitbit says it will shift manufacturing out of China to avoid tariffs

Key Points
  • Fitbit shares rose briefly Wednesday after the company announced it would shift its manufacturing operations outside of China to avoid tariffs.
  • All of Fitbit's fitness trackers and smartwatches will not be subject to Section 301 tariffs as of 2020.
A Fitbit display is seen at a Target store in Los Angeles.
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Shares of Fitbit briefly rose 2% after the company announced Wednesday it plans to shift its manufacturing operations outside of China to avoid tariffs. The stock was down slightly late Wednesday morning.

Beginning in 2020, all of Fitbit's fitness trackers and smartwatches will not be of Chinese origin, meaning they won't be subject to Section 301 tariffs, the company said.

"In 2018, in response to the ongoing threat of tariffs, we began exploring potential alternatives to China," Ron Kisling, Fitbit's CFO, said in a statement. "As a result of these explorations, we have made changes to our supply chain and manufacturing operations and have additional changes underway."

Fitbit in June joined a number of U.S. companies, including Apple, in filing a letter of opposition to the Trump administration's plan to slap additional tariffs on Chinese goods, according to Reuters. In the letter, Fitbit said the tariffs would end up benefiting Chinese device makers who do business in the U.S.

Earlier this year, President Donald Trump announced a new wave of tariffs on about $550 billion in Chinese goods, marking an escalation in the U.S.-China trade war. Trade tensions have been going on for more than a year, with many technology companies being hit by the dispute.

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