Fitbit fleeing China to avoid Trump's tariffs

Fitbit is moving out of China.

The wearable-fitness-device manufacturer said Wednesday that starting in January 2020 the production of all its trackers and smartwatches will be done outside China and therefore not be subject to Section 301 tariffs.

Shares initially rallied following the announcement before turning lower.

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“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,” CFO Ron Kisling said in a press release. “Based on these changes, we expect that effectively all trackers and smartwatches starting in January 2020 will not be of Chinese origin.”

Fitbit says it will discuss its move in greater detail on its third-quarter earnings. A date has not yet been announced.

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Shares were down 25.7 percent this year through Tuesday.