Report: American Companies Fleeing China After Coronavirus Debacle

According to a new Reshoring Index from the manufacturing consulting firm Kearney’s, American companies are leaving China in record numbers after the COVID-19 debacle and the Chinese Communist Party’s reprehensible attempts to coverup the pandemic in the early days of the outbreak. In the new report, co-author Patrick Van den Bossche warns that China may have cost itself dearly with their initial “ignore it and it will go away” approach to the coronavirus.

“Three decades ago, U.S. producers began manufacturing and sourcing in China for one reason: costs. The trade war brought a second dimension more fully into the equation―risk―as tariffs and the threat of disrupted China imports prompted companies to weigh surety of supply more fully alongside costs. COVID-19 brings a third dimension more fully into the mix­, and arguably to the fore: resilience―the ability to foresee and adapt to unforeseen systemic shocks,” writes Van den Bossche.

The report comes as U.S. lawmakers have been urging both the government and private manufacturers to bring their business home from China’s shores. Sen. Marco Rubio has been particularly vehement in warning that America can no longer rely on China for its pharmaceutical supplies.

This need to pivot became exceptionally glaring last month, when an article in Chinese state media suggested that China could “announce strategic control over medical products and ban exports to the United States. Then the United States will be caught in the ocean of new coronaviruses.”

Sen. Rubio said at the time: “If they can threaten to cut us off from our pharmaceutical supplies, they could trigger a domestic problem here that would make it difficult for us to confront them. It’s a tremendous amount of leverage.”

Forbes’ Kenneth Rapoza said that the coming economic re-alignment could massive:

China is the go-to source for ibuprofen, hazmat suits, rubber gloves, surgical masks, ventilators. Probably toilet paper, for all we know. How this is not a national security issue is something being raised by senators including Josh Hawley (R-MO) and Tom Cotton (R-AK).

The threat going forward of political anger toward China, not to mention future pandemics stemming from China (the first SARS came from there in 2002-03), means that companies will want to hedge their supply chain strategy by spreading their risks.

That doesn’t mean a full abandonment of China. It does mean China’s days as the go-to manufacturing hub for the Western world are over.

Well, the CCP did this to themselves. Their bad practices, unethical trade violations, and unsanitary food service industry have all come together to create one of the worst global crises in modern history. For us to go back to “business as usual” with China after all this is over would be the very definition of madness.


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