To avoid US taxes, Google will remove Pixel factories from China

One more company is trying to get its production out of China. According to the Nikkei newspaper, Google would be working even harder to relocate its Pixel smartphone factory to Vietnam. The reason would be to avoid the high costs of Chinese production, and to escape mood swings between the Donald Trump and Xi Jinping governments.

The local newspaper said it talked to two people close to the project. Google's proposal is to create a low-cost factory in Southeast Asia to ship smartphones and other hardware manufacturing later this year.

The company will take advantage of a former Nokia factory in northern Vietnam, in a region called Bac Ninh. The village has also embraced other companies in the past, such as Samsung . With that, Google would have specialized staff for the job.
To avoid US taxes, Google will remove Pixel factories from China
The move is due to local pressures by labor laws. In addition, the company also wants to evade US import tariffs from China. The two governments continue in clashes that do not show good signs for the future. Trump has vowed to hold back by the end of the year the import tariff increase for electronics, including smartphones, video games and other gadgets.

Last year, 70% of Pixel sales were in the United States. That is, an increase in the import tariff would have a major impact on the company. Within the smart speaker sector, 65% of the total was also sent to the US market.

The sources also reported that the change is also part of a Google expansion. The company will start with smartphones, but plans to bring other devices to Vietnam, such as Home and Chromecast. For now, the company's connected home lines should be transferred to Thailand, according to sources.

Google is expected to manufacture and market between 8 million and 10 million Pixel smartphones this year. That would be double the number last year with 4.7 million handsets. According to IDC, only in the first half of this year, the company sold 4.1 million - showing that the double estimate is quite possible.

The giant makes the move along with other big market. The LG and Dell also withdrew part of their production, creating laptops assembly lines in Southeast Asia. This year, Apple has begun to look into other regions to produce its iPhones in partnership with Foxconn .

Despite the changes, Google will still continue to produce its new handsets in China, including the Pixel 4, expected for 2019.

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