Report: Trump ‘turbo-charging’ efforts to withdraw global supply chains from China

President Donald Trump has made it clear that he views China as responsible for the death and economic destruction caused by the coronavirus, even hinting that he will take steps to hold the regime accountable.

The time for such action may be fast approaching. The Trump administration is said to be “turbo-charging” a plan to relocate U.S. manufacturing and supply chains out of China, Reuters reported on Tuesday.

In keeping with Trump’s oft-stated desire to see a resurgence in domestic manufacturing, the goal of the initiative is to get U.S. companies to move their manufacturing and supply chains back home — or at least away from China and into friendlier locales.

“Turbo-charging” exit from China

Keith Krach, the State Department’s undersecretary for Economic Growth, Energy, and the Environment, told Reuters, “We’ve been working on (reducing the reliance of our supply chains in China) over the last few years but we are now turbo-charging that initiative.

“I think it is essential to understand where the critical areas are and where critical bottlenecks exist,” he added.

Action on that front could be coming soon, Krach and other unnamed current and former U.S. officials reported, according to Reuters, and it could range from imposing new tariffs on China to more implementing coercive tax incentives and subsidies intended to draw American companies back home.

Wide range of options considered

Another unnamed official told Reuters that both the Commerce and State Departments, as well as other federal agencies, are investigating what sorts of manufacturing should be considered “essential” to the U.S. and how best to achieve the production of those goods outside of China.

“This moment is a perfect storm; the pandemic has crystallized all the worries that people have had about doing business with China,” the senior official said. “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” caused by fallout from the virus.

As noted, new tariffs could be imposed on Chinese-made products on top of the already-existing 25% tariffs. That isn’t the only tool available, however; the administration is also reportedly considering such options as imposing sanctions on Chinese regime officials and state-owned companies, as well as a publicly-closer relationship with Taiwan, an independent island nation off the coast of China that the regime still considers to be a part of China itself.

Another idea reportedly being considered, according to one official, is the formation of an “Economic Prosperity Network” that would be comprised of “trusted partners” including corporations, civil society groups, and even allied nations. That network would work cooperatively on issues like commerce, digital business, education, energy production, infrastructure development, research, and trade, among other things.

Tough but necessary changes

Given the cost-benefit analysis that lured U.S. companies to set up shop in China in the first place, it may prove difficult to convince some of them to bring their manufacturing and supply chains back home, where production would admittedly be more expensive.

That said, it has never been more obvious or more necessary for the U.S. to substantially reduce its reliance on China for cheaply-made goods and supplies, and the Trump administration appears to be pursuing multiple avenues to rectify that economic dependence as soon as possible.

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