Trump gears up to punish China
THE Trump administration is “turbocharging” an initiative to remove global industrial supply chains from China as it weighs new tariffs to punish Beijing for its handling of the coronavirus outbreak, according to US officials.
President Donald Trump, who has stepped up recent attacks on China ahead of the November US presidential election, has long pledged to bring manufacturing back from overseas.
China has accused Trump’s administration of trying to distract from its own incompetence with allegations about the spread of the coronavirus. The US has the most cases, and the most fatalities in the world
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, the current and former officials said.
Trump’s China policy has been defined by behind-the-scenes tussles between pro-trade advisers and China hawks; now the latter say their time has come.
Trump has said repeatedly that he could put new tariffs on top of the up to 25% tax on $370 billion (R6.9 trillion) in Chinese goods now in place.
The US is pushing to create an alliance of “trusted partners” dubbed the “Economic Prosperity Network”, one official said. It would include companies and civil society groups operating under the same set of standards on everything from digital business, energy and infrastructure to research, trade, education and commerce.
The US government is working with Australia, India, Japan, New Zealand, South Korea and Vietnam to “move the global economy forward. China overtook the US as the world’s top manufacturing country in 2010, and was responsible for 28% of global output in 2018, according to UN data. The pandemic has highlighted China’s key role in the supply chain for generic drugs that account for the majority of prescriptions in the US. It has also shown China’s dominance in goods like the thermal cameras needed to test workers for fevers.
Many US companies have invested heavily in Chinese manufacturing and rely on China’s 1.4 billion people for a big chunk of their sales.