The Trump Administration is “turbocharging” an initiative to rip global industrial supply chains from China as it weighs new tariffs to punish Beijing for its handling of the coronavirus outbreak.
President Trump has stepped up attacks on China ahead of the 3 November US Presidential election, and he vows to bring manufacturing home from overseas.
Now, economic destruction and the C-19 coronavirus death toll are driving a government push to move US production and supply chain dependency away from China, even if it goes to other more friendly nations
“We have been working on reducing reliance of our supply chains in China over the last few years but we are now turbo-charging that initiative,” Keith Krach, Undersecretary for Economic Growth, Energy and the Environment at the US State Department said.
“I think it is essential to understand where the critical areas are and where critical bottlenecks exist,” Mr. Krach said, adding that the matter is Key to US security and one the government could announce new action on very soon.
The US Commerce Department, State and other agencies are looking for ways to push companies to move both sourcing and manufacturing out of China. Tax incentives and potential re-shoring subsidies are among measures being considered to spur changes.
“There is a whole of government push on this.” Agencies are probing which manufacturing should be deemed “essential” and how to produce these goods outside of China.
President Trump’s China policy has been defined by behind-the-scenes talks between pro-trade advisers and China hawks; now the latter’s time is at hand.
“This moment is a perfect storm; the pandemic has crystallized all the worries that people have had about doing business with China,” said a senior US official.
“All the money that people think they made by making deals with China before, now they’ve been eclipsed many fold by the economic damage” from the coronavirus, the official said.
The US government is working with Australia, India, Japan, New Zealand, SKorea and Vietnam to “move the global economy forward,” Secretary of State Mike Pompeo said recently.
These discussions include “how we restructure … supply chains to prevent something like this from ever happening again,” Secretary Pompeo said.
Latin America may play a role, too.
Have a healthy day, Keep the Faith!