US Government Looking to Encourage Companies to Move Out of China?
Even as tensions between the US and China threaten to flare up all over again, this time due to the coronavirus pandemic, US government officials are exploring ways to remove global supply chains from China and reduce dependence on the nation. Late last week, US President Donald Trump suggested the possibility of hiking tariffs on Chinese goods over suspicions that the pandemic originated in a lab in China.
With Presidential elections looming, Trump has once again refreshed his intent to bring back manufacturing and jobs into America. With the US economy suffering on account of the shutdowns due to the coronavirus pandemic, the Trump administration has increased its efforts to move production out of China, and either bring it back home or switch to friendlier alternatives.
According to undersecretary for Economic Growth, Energy and the Environment at the U.S. State Department, Keith Krach, “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.”
Government agencies are looking to offer tax incentives and re-shoring subsidies to US companies who could move their sourcing and manufacturing processes out of China. Priorities are to move out production of essential goods from China, and tensions about the pandemic have already driven a great deal of interest among companies to move away from China.
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