By Tank Murdoch
(TNS) Fox Business Network’s Maria Bartiromo had some really bad news for China during an appearance on sister network Fox News Thursday: Kiss a lot of your manufacturing goodbye.
Oh, and you can thank your miserable mishandling of the Wuhan coronavirus for it.
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During an interview with Sandra Smith, the host of “Sunday Morning Futures” spoke about moving the supply chain back to America after the massive supply chain disruptions caused by the outbreak, which idled scores of ChinaCo factories after tens of millions of Chinese workers were quarantined.
After a massive hit to the U.S. stock market and other economic fallout, the end result surely will be the rush to move production out of China and back to other countries including the United States, so we don’t get caught flat-footed and wanting the next time a deadly virus escapes China (two in 18 years).
It’s also likely to happen a) because President Trump is an “America First” guy; and b) the virus also exposed the fact that the U.S. government has become too depending on China for products and goods.
“We need to change that mentality, we need to make sure the production is happening in American and our own vital institutions, that really they are probably the bulk of buying when it comes to health care products, in the government, they need to start buying American as well,” said Bartiromo.
“There is going to be a major shift on the part of corporate America as well as government agencies to focus on production in America,” Bartiromo continued.
“That’s why I think this crisis, over the long term, is gonna be bad news for China because American companies are not going to trust that China will keep to their contracts,” she said, adding that the U.S. will be “much more prepared” in doing business with the communist nation in the future.
In fact, the supply chain shift out of China has already begun, as we reported earlier this month:
Thanks to the virus’ spread and continued factory production slowdowns in China, U.S. supply chains for all kinds of things ranging from consumer goods to medical supplies needed to combat the virus at home are in short supply. The reason is simple: When your own economy is so massively intertwined with the economy of just one other nation, it only stands to reason that your country will suffer when that other country has a major problem producing the goods you need.
As such, U.S. companies are accelerating their plans to move operations out of China to neighboring Asian countries like Vietnam, Taiwan, and Thailand.
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While we’d like to see more of that manufacturing come back to the U.S., overall foreign investments in America are up in the Age of Trump. In July 2019, the U.S. Bureau of Economic Activity reported:
The foreign direct investment in the United States position increased $319.1 billion to $4.34 trillion at the end of 2018 from $4.03 trillion at the end of 2017. The increase mainly reflected a $226.1 billion increase in the position from Europe, primarily the Netherlands and Ireland. By industry, affiliates in manufacturing, retail trade, and real estate accounted for the largest increases.
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