U.S. looks to restructure global supply chains to exclude China as it weighs new tariffs to punish Beijing for withholding early coronavirus details from the world.

  • Current and former senior U.S. administration official said economic destruction and the massive U.S. coronavirus death toll are driving a government-wide push to move U.S. production and supply chain dependency away from China, even if it shifts the supply chain to other nations.
  • Keith Krach, undersecretary for Economic Growth, Energy and the Environment at the U.S. State Department said, “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.”
  • The U.S. is looking for ways to push companies to move sourcing and manufacturing out of China via potential tax incentives and re-shoring subsidies.
  • One official said an alliance called the “Economic Prosperity Network” would be created to ensure cooperative entities operated under standard procedures over everything including “digital business, energy and infrastructure, research, trade, education, and commerce.”
  • On April 29, Secretary of State Mike Pompeo said the U.S. is working with Australia, India, Japan, New Zealand, South Korea, and Vietnam to “move the global economy forward”, a statement which some believe may hint at the structure of the purported Economic Prosperity Network alliance.
  • China overtook the United States as the world’s top manufacturing country in 2010, and was responsible for 28% of global output in 2018.
  • The coronavirus pandemic has highlighted China’s role in the supply chain for generic drugs that account for the majority of prescriptions in the United States as well as medical supplies, electronics, and food supplies.
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