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WASHINGTON: The Trump administration is “pushing” an initiative to remove China’s global industrial supply chains as it weighs new tariffs to punish Beijing for its handling of the coronavirus outbreak, according to officials familiar with the United States’ planning.
President Donald Trump, who has stepped up recent attacks on China ahead of the Nov. 3 presidential election in the United States, has long pledged to return manufacturing from abroad.
Now, economic destruction and the massive death toll from the US coronavirus. USA They are driving a government-wide push to move production and dependency off the US supply chain. USA
“We have been working on [reducing the reliance of our supply chains in China] in the last few years, but now we are carrying that initiative, “said Keith Krach, undersecretary for economic growth, energy and environment at the US State Department. Reuters
Also read: Trump blames China for working against his reelection bid
“I think it is essential to understand where the critical areas are and where there are critical bottlenecks,” Krach said, adding that the matter was key to the security of the United States and that the government could announce new action soon.
The US Department of Commerce. The US, the state, and other agencies are looking for ways to pressure companies to move both supply and manufacturing out of China. Tax incentives and possible re-shoring subsidies are among the measures being considered to drive the changes, current and former officials told Reuters.
“There is a whole government push in this,” one said. Agencies are investigating which manufacturing should be considered “essential” and how to produce these products outside of China.
Trump’s policy in China has been defined by behind-the-scenes disputes between pro-business advisers and China’s hawks; Now the latter say that their time has come.
“This moment is a perfect storm; The pandemic has crystallized all the concerns people have had about doing business with China, “said another senior US official.
“All the money that people think they have earned by making deals with China before has now been overshadowed by economic damage” from the coronavirus, the official said.
Economic prosperity network
Trump has repeatedly said he could put new tariffs on top of the up to 25% tax on $ 370 billion in Chinese products currently in effect.
US companies, which pay the tariffs, are already complaining about existing ones, especially when sales plummet during coronavirus blockades.
But that doesn’t mean Trump will oppose the new ones, authorities say. Other ways to punish China may include sanctions against officials or companies, and closer relations with Taiwan, the autonomous island that China considers a province.
But discussions of supply chain movement are concrete, robust, and, unusually for the Trump administration, multilateral.
The United States is pushing to create an alliance of “trusted partners” called the “Economic Prosperity Network,” an official said. It would include companies and civil society groups operating under the same set of standards in everything from digital business, energy and infrastructure to research, commerce, education and commerce, he said.
The United States government is working with Australia, India, Japan, New Zealand, South Korea and Vietnam to “move the world economy forward,” Secretary of State Mike Pompeo said April 29.
Also read: China could face ‘consequences’ of coronavirus pandemic, Trump warns
These discussions include “how we restructure … supply chains to prevent something like this from happening again,” Pompeo said.
Latin America can also play a role.
Colombian Ambassador Francisco Santos said last month that he was in talks with the White House, the National Security Council, the United States Treasury Department and the United States Chamber of Commerce on a push to encourage American companies to move some supply chains out of China and bring them closer to their homes.
China surpassed the United States as the world’s leading manufacturing country in 2010, and was responsible for 28% of world production in 2018, according to United Nations data.
The pandemic has highlighted China’s key role in the generic drug supply chain here that accounts for the majority of prescriptions in the United States. It has also demonstrated China’s dominance in products like here, the thermal cameras needed to assess workers’ fever, and its importance in the food supply.
Hard sale for companies
Many American companies have invested heavily in Chinese manufacturing and rely on China’s 1.4 billion people for a large portion of their sales.
“Diversification and some redundancy in supply chains will make sense given the level of risk the pandemic has uncovered,” said Doug Barry, spokesman for the US-China Trade Council. “But we don’t see a wholesale fever for the departures of companies doing business in China.”
John Murphy, senior vice president of international policy for the United States Chamber of Commerce, said that American manufacturers already satisfy 70% of current pharmaceutical demand.
Construction of new facilities in the United States could take five to eight years, he said. “We are concerned that officials need to obtain the correct information before beginning to look for alternatives,” Murphy said.
Trump’s White House promises to punish China have not always been followed up by action.
A move to block global chip exports to Chinese telecoms giant Huawei, for example, favored by hawks in administration and under consideration since November, has yet to be finalized.
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