Fitbit (FIT - Get Report) has had enough of the fallout from the trade war between the U.S. and China and as a result will move manufacturing operations outside of China for all of its trackers and smartwatches.
Starting in January 2020, the products will no longer be of Chinese origin, and therefore not subject to Section 301 tariffs.
"In 2018, in response to the ongoing threat of tariffs, we began exploring potential alternatives to China. As a result of these explorations, we have made changes to our supply chain and manufacturing operations and have additional changes underway," said Ron Kisling, chief financial officer of Fitbit.
In an email to TheStreet the company said that it will provide further guidance on where it will be moving operations on its upcoming third quarter call.
Fitbit shares were rising 1.5% to $3.74 in trading Wednesday. The stock has declined more than 20% year to date.
Fitbit was one of numerous U.S. companies that filed letters of opposition to the Trump administration's plan to expand U.S. tariffs on Chinese-made goods in June.
The company said at the time that tariffs would result in a competitive advantage for Chinese device makers in the U.S. market, which would induce "national security concerns by placing sensitive U.S. health, location and financial data within the Chinese government's reach."
In the end, Fitbit concluded that Chinese rivals would sacrifice profit to gain market share "in a manner that U.S. companies like Fitbit cannot afford."