Western tech companies are adopting the ABC strategy to diversify their manufacturing and supply chain demands beyond China. Giants in the tech industry are considering the ‘Anything But China’ (ABC) approach to realign their goals with guidelines issued by the US President Donald Trump and his administration. Donald Trump has announced his plans of reducing dependency on China to fight growing geopolitical tensions between the 2 countries.

The ongoing feuds between the United States and China have hit the semiconductor sector in unimaginable ways. Donald Trump has imposed several measures on US exports to restrict China’s production process for manufacturing advanced chips. A number of leading tech companies like Nvidia are expanding their operations in Asian countries other than China. These countries include Vietnam and Malaysia that might gain more favor from the US government in increasing the rate of manufacturing for Western tech companies.

Manufacturing hubs are introducing innovative tools used by online gaming platforms to monitor various activities. Tech companies in the US can access information in real-time and analyze data to capture insights that can generate revenue in the near future. The next 10 years can make or break global tech companies based outside of China.

According to US authorities, China poses a risk to the economic conditions that have helped tech companies prevail in the global market. New regulations announced by Donald Trump seek to reduce the impact of China on policies drafted in the US. The Federal Bureau of Investigation (FBI) in America has indicated that the Chinese government is actively restructuring its manufacturing facilities to benefit Beijing in 2025.

Earlier this year, Chinese companies were added to the US Commerce Department’s Entity List to tighten their stance on the ABC strategy. Tencent, the gaming company from China was recently blacklisted in the US, preventing it from acquiring the technology and goods required to run its operations. Chinese organizations like CATL and Tencent might need a special license to order technological products, drastically increasing the time it takes to manufacture units.

What is the ABC approach?

The ABC approach or the Anything But China trend has become prevalent among multinational tech companies. It has urged tech companies in the US to find alternative manufacturing methods as a diversification strategy.

Previously, a majority of the Western tech companies had set up their manufacturing bases in China. However, the influence of manufacturing and supply chains on US laws and policies has shifted the focus of the tech industry to other Asian countries. Vietnam, Malaysia, and India, are among the biggest countries that have invited Western tech giants to amplify their manufacturing processes with cutting-edge assembly lines for smooth delivery.

A permanent relocation of supply chains from China to other Asian countries might be a step in the right direction. Trade restrictions have prompted tech companies to move their facilities away from China to avoid paying higher tariffs. Although China is preparing to create its chip manufacturing ecosystem within the country, Western tech companies are leaning towards Latin American nations like Mexico.

Donald Trump adds 10% tariff on China

The President of the United States, Donald Trump, has declared a 10% tariff on Chinese imports. The tech industry is worth over a trillion dollars worldwide. The recent announcement of increasing tariffs on manufactured units from China can hit hard at Western tech companies trying to turn a profit in 2025.

Countries in North America such as, Canada and Mexico, have enjoyed a free trade agreement with the US. The $53 billion U.S. CHIPS Act has funded a number of Western tech companies to manufacture technology and goods domestically to boost the economy. Donald Trump recommends the production of semiconductors on American soil to eliminate the dependence on China and other foreign suppliers. Components like sensors and circuits can be manufactured in the US to maintain economic and political stability.

Malaysia has stepped forward as a potential alternative to China in the manufacturing of semiconductors. Government officials from Malaysia have proposed tax breaks to assist tech companies following the ABC strategy for business growth. The Asian country is also committed to training 50,000 engineers to boost operations in the technology sector. Marvell Technology is a California-based tech company that has increased its employees in Vietnam from 300 to 470 engineers in 2024 to fulfill supply chain demands.

China backs US resolution to end the war in Ukraine

China is supporting the US and its resolution to end the war in Ukraine. In a voting session at the UN Security Council, Russia and China stood united in backing the US to resolve the conflict in Ukraine without accusing Moscow of its military actions. Countries like the United Kingdom and France have abstained from voting.

The US might consider negotiating its trade terms with China due to its alliance. Russia has reported trade worth over $245 billion with China in 2024. The relationship between Chinese President Xi Jinping, US President Donald Trump, and Russian President Vladimir Putin, could be vital in establishing a fair trade policy for Western tech companies. China could emerge as a winner by holding talks to ease trade policies with Europe and the US.

Foreign policies that are affected due to Trump’s administration could lead to trade opportunities for China. Nations like Japan and Australia might reach out to China for manufacturing needs since the US has begun imposing tax tariffs on other countries around the world.