VMware: Companies need to determine a 'dual trading block' with US-China rift

VMware: Companies need to determine a 'dual trading block' with US-China rift

Both VMware and Dell have had to make adjustments

VMware CEO Pat Gelsinger

VMware CEO Pat Gelsinger

Credit: VMware

VMware CEO Pat Gelsinger addressed the US-China trade dispute in saying the world was increasingly moving towards two trading blocks: one heavily partnered with China and another with the US.

“We don’t think these disputes and issues will get resolved quickly. It will take a long time," Gelsinger said. "Every company needs to determine how it lives in dual trading bloc and build up supply chains, engagements and customers and the trading partners it works with.

“We’re committed to China, and we’re adjusting how we work with that portion, but we’re also super committed as a US company with partnerships and compliance with the law of both countries. We’re committed to both, and we’re in the process of figuring out this dual supply chain world.”

Michael Dell, chairman and CEO of Dell Technologies, added he was in discussions with government officials to continue to encourage them to find a successful resolution to the current tensions, which he didn’t find productive for business.

“Certainly we’ve had to make some adjustments to our business to deal with the tariffs and we’ll continue to make those adjustments," Dell said. 

"Our first priority is to ensure continuity of supply for our customers and we’ve been able to do that. We’ve got a very substantial business inside China and outside China that relies on our global supply chain.”

According to an article in The New York Times, US President Donald Trump said he would increase taxes on all Chinese goods and demanded that American companies stop doing business with China, after China said it would retaliate against the US next round of tariffs by raising taxes on US goods. 

Trump said he would bolster existing tariffs on $250 billion worth of Chinese goods to 30 per cent from 25 per cent, coming into effect on 1 October. 

Julia Talevski attended VMworld 2019 in San Francisco as a guest of VMware.

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