Lenovo Plans To Raise Prices?
(RTTNews) - China's Lenovo Group Ltd. warned it may have to raise prices of its products if the U.S. moves ahead with the decision to impose additional tariffs on Chinese goods, according to a report by Reuters.
The warning by Lenovo, the world's largest PC maker, comes amid the escalating trade war between the U.S. and China that has raised concerns about the global economic outlook.
On Tuesday, U.S. Trade Representative Robert Lighthizer offered a temporary reprieve by announcing a delay in imposing new tariffs on certain Chinese products. Lighthizer said the 10 percent tariff set to take effect on September 1 would be delayed until December 15 for certain products.
The products benefiting from the delay in tariff implementation include cell phones, laptop computers and computer monitors, while the tariffs on desktops would still be imposed from September.
According to the Reuters report, Lenovo Chairman Yang Yuanqing said during an earnings call on Thursday that retail prices for products like PC and smartphones will increase if the tariffs on Chinese goods are implemented by the U.S.
Yuanqing also reportedly said that shifting manufacturing from China to other countries in order to avoid U.S. tariffs would lead to price increases.
On Thursday, Lenovo reported net income for the first quarter that more than doubled from the prior-year period to $162 million, while group revenue recorded the eighth consecutive quarter of growth year-over-year to reach $12.5 billion.
Lenovo noted in a statement that its first-quarter results signaled the company continued to outperform the market and lead the global tech sector in spite of industry-wide geopolitical and trade uncertainties.
"To date there has been negligible material impact on the business," the company said.
In July, the Nikkei Asian Review reported that several major technology companies are planning to shift substantial production capacity out of China, spurred by the bitter trade war between Washington and Beijing.
Microsoft, Google, Amazon.com, Sony and Nintendo are planning to move some of their game console and smart-speaker manufacturing out of China, according to the report.
Lenovo, Acer and Asustek Computer were also said to be evaluating plans to shift out of that country.
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