Companies are moving their supply chains out of China instead of waiting for a resolution of the trade war between Washington and Beijing, BlackRock Chairman and CEO Larry Fink told CNBC on Friday.
“We’re hearing from CEOs that more and more supply chains are moving out of China right now, ” Fink said on “Squawk Box.” “People are not waiting, companies are not waiting to see what the outcome is.”
The trade fight between the world’s two largest economies has been going on for about a year, and businesses are starting to feel the repercussions.
President Donald Trump has slapped 25% tariffs on $200 billion worth of Chinese goods and continues to threaten duties on an additional $325 billion of goods as trade negotiations continue.
More than 50 multinational companies are moving production out of China, including Apple, Nintendo and Dell, CNBC previously reported. Companies began announcing in May that they would move from China to Vietnam, as China and the U.S. stepped up tit-for-tat duties.
Brooks Running — which is part of Warren Buffett’s Berkshire Hathaway — said in May it would be “predominantly in Vietnam by the end of the year,” adding that about 8,000 jobs will move there from China.
At the same, the Chinese economy is starting to lag, having grown just 6.2% in its second quarter. That’s the weakest rate in at least 27 years. Trade data released last week showed China’s June exports fell 1.3% year over year due to the tariffs.
“I do believe the trend in China continues to be downward, ” said Fink, co-founder of the world’s largest money manager. “I think long term, China knows they need to find ways to stimulate more of their domestic economy.”