U.S. and Chinese Presidents Donald Trump and Xi Jingping might have negotiated a temporary ceasefire in their ongoing trade war last week, but many American technology firms are still looking to move their manufacturing operations away from China.

A report from the Nikkei Asian Review Wednesday said companies that include Dell Technologies Inc., HP Inc., Microsoft Corp. and Amazon.com Inc. have joined other American tech firms in making plans to move some hardware production out of China, ostensibly to get around new tariffs imposed on that country by President Trump.

Nikkei said Dell and HP are both looking to move as much as 30% of their laptop production out of China, while Microsoft wants to shift some Xbox production, and Amazon is looking to move out its Echo and Kindle manufacturing away. Others, including Acer Inc. and Asustek Computer Inc., are also looking to move operations to a third country, the report said.

The moves follow Trump’s recent decision to impose a 25% tariff on $200 billion worth of Chinese-manufactured goods. Up until now, the technology industry has largely remained unscathed, but the companies worry the tariffs could be extended to products such as laptops, smartphones and video games consoles. That would add significant costs and lead to much higher prices for consumers and reduced profits for the companies.

Other U.S. firms have already signaled plans to move production out of China. Nikkei earlier reported that Apple Inc. was looking to move as much as 30% of its hardware production fro the country, while Bloomberg previously said Google LLC is looking to move some production of its Nest smart thermostat products.

Technology hardware manufacturing has historically been centered on China thanks to its cheaper production costs and high concentration of component suppliers. Its become an important industry for the country, which is the world’s largest manufacturer of both PCs and smartphones.

If the companies do switch operations away from China, it would be a huge blow to its electronics exports, which have helped to power decades of economic growth. Nikkei said the country’s imports and exports in the industry grew by 136 times, from $10 billion in 1991 to $1.35 trillion in 2017.

Analyst Charles King of Pund-IT Inc. said the current uncertainty over the trade tariffs and the proposed moves away from China highlight how critical stability and predictability are for tech firms when it comes to planning their manufacturing operations.

“You can’t account for every detail or happenstance, but legal and economic structures like trade deals provide sound foundations for companies to build business plans and strategies,” King said. “Take those away or subject them to the egotistical whims of political hacks and everyone suffers.”

For Trump, the moves no doubt align with his strategy of increasing the pressure on China to agree to more favorable trade terms. But they’re unlikely to help bring back manufacturing jobs to the U.S., which is another of his goals.

U.S. production costs remain prohibitively expensive, so many of the companies are instead looking to shift Chinese production to nearby countries in Southeast Asia. India, with its low labor costs, could be another option, Nikkei reported.

HP, for example, is looking to build new supply chains in Thailand and in Taiwan, and it could begin some operations in those countries as early as July. Dell, meanwhile, has already started a pilot run of notebook production in the Philippines, Taiwan and Vietnam.

Other companies may have to move more slowly, though, since it can take a long time to source the local expertise necessary to kickstart manufacturing operations from a new base, Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, told SiliconANGLE.

“Many of these companies began moving manufacturing out of China to other destinations a year ago, but there are limits to how quickly it can go,” Moorhead said. “PC and server companies will have the easiest time moving manufacturing versus smartphones companies. Apple, for example, which works primarily with Foxconn for smartphones, has to import workers from Indonesia to fill its iPhone manufacturing facility. There just aren’t enough workers for smartphones, which take more than PCs and servers.”

The lack of skilled workers elsewhere might help China to retain some of its industry, but another concern is that it may not be able to persuade those companies that do move their production operations away from the country to return, even if it manages to resolve its dispute with Washington.

Darson Chiu, an economist specialized in trade at the Taiwan Institute of Economic Research, told Nikkei that there’s “no turning back” since the moves aren’t just motivated by the trade tariffs but also by rising labor costs and other factors. “Southeast Asian countries and India will together become new competitive hubs in coming years for electronics production,” he said.

“Given the uncertainty of the trade war between the U.S. and China it’s only reasonable for enterprises with manufacturing and service capacity in China to look for alternatives,” added Holger Mueller, principal analyst and vice president at Constellation Research Inc. “For larger investment it looks like India will be the winner across the field, ahead of additional investments that enterprises are looking at in Vietnam and Thailand and to some extent, Malaysia.”

King noted that China’s rising labor costs illustrate the delicate nature of cut-rate pricing, which is how China built up its electronics industry in the first place. The problem is that when a country’s economy grows thanks to the success of its industries, wages also rise, causing businesses to look for low-cost workers elsewhere, he said.

“Consider that while ‘Made in Japan’ once connoted cheap and shoddy goods, that perception was reversed just a few decades later,” King said, adding that that’s what seems to be happening in China today. “In the current situation, it’s entirely sensible for U.S. IT vendors to consider moving their manufacturing capacity elsewhere both to escape the Trump administration’s targeting of China and Chinese businesses, and to capture lower costs.”

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