US President Donald Trump’s 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 officials familiar with US planning.
Economic destruction and the US’ massive COVID-19 death toll are driving a government-wide push to move US production and supply chain dependency away from China, even if it goes to other more friendly nations instead, current and former senior US administration officials said.
“We’ve been working on [reducing the reliance of our supply chains in China] over the last few years but we are now turbocharging that initiative,” US Undersecretary for Economic Growth, Energy and the Environment Keith Krach at the Department of State said.
Photo: AFP
“I think it is essential to understand where the critical areas are and where critical bottlenecks exist,” Krach said, adding that the matter was key to US security and one the government could announce new action on soon.
The US Department of Commerce, the State Department and other agencies are looking for ways to push companies to move both sourcing and manufacturing out of China.
Tax incentives and potential reshoring subsidies are among measures being considered to spur changes, the current and former officials said.
“There is a whole of government push on this,” one said.
Agencies are probing which manufacturing should be deemed “essential” and how to produce these goods outside of China.
Other ways to punish China besides additional tariffs include sanctions on officials or companies, and closer relations with Taiwan.
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, he said.
“Diversification and some redundancy in supply chains will make sense given the level of risk that the pandemic has uncovered,” US-China Business Council spokesman Doug Barry said. “But we don’t see a wholesale rush for the exits by companies doing business in China.”
CICIR REPORT
Meanwhile, an internal Chinese report warned that Beijing faces a rising wave of hostility in the wake of the pandemic outbreak that could tip relations with the US into confrontation, people familiar with the paper told Reuters.
The report, presented early last month by the Chinese Ministry of State Security to top Beijing leaders, including Chinese President Xi Jinping (習近平), concluded that global anti-China sentiment is at its highest since the 1989 Tiananmen Square crackdown, the sources said.
As a result, Beijing faces a wave of anti-China sentiment led by the US in the aftermath of the pandemic and needs to be prepared in a worst-case scenario for armed confrontation between the two global powers, according to people familiar with the report’s content, who declined to be identified given the sensitivity of the matter.
The report was drawn up by the China Institutes of Contemporary International Relations (CICIR), a think tank affiliated with the Chinese Ministry of State Security.
Reuters has not seen the briefing paper, but it was described by people who had direct knowledge of its findings.
Reuters could not determine to what extent the stark assessment described in the paper reflects positions held by China’s state leaders, and to what extent, if at all, it would influence policy, but the presentation of the report shows how seriously Beijing takes the threat of a building backlash that could threaten what China sees as its strategic investments overseas and its view of its security standing.
The report described to Reuters warned that anti-China sentiment sparked by the coronavirus could fuel resistance to China’s Belt and Road infrastructure investment projects, and that Washington could step up financial and military support for regional allies, making the security situation in Asia more volatile.
A signaling system malfunction disrupted high-speed rail (HSR) services beginning at 8am today, with trains temporarily reduced to three northbound and three southbound trains per hour as authorities conduct inspections. The malfunction occurred on a section of track in Miaoli County during pre-operation checks early this morning, forcing northbound and southbound trains to use a single track, the HSR operator said. The regular schedule has been replaced with three hourly trains offering only nonreserved seating in each direction, stopping at every station, it said, adding that business class cars would still have reserved seating. Departures from terminal stations are scheduled at the top
DRONE CENTRAL: Taiwan aims to become Asia’s democratic hub for drones, with most exports focused on high-quality military-grade models, an official said Taiwan’s drone industry is expected to expand significantly by 2030, producing 100,000 units per month and exporting half of them, the Ministry of Economic Affairs said yesterday. Current drone production capacity is about 15,000 units per month, but the industry can quickly scale up as demand increases, Industrial Development Administration Director-General Chiou Chyou-huey (邱求慧) told a news conference in Taipei. Taiwan’s drone output grew 2.5-fold last year to NT$12.9 billion (US$408.3 million) under a government program to develop the uncrewed vehicle sector, he said. The Executive Yuan in October last year approved plans to invest NT$44.2 billion into domestic production of uncrewed aerial
VERBOSE VESSELS: A CGA cutter and a China Coast Guard exchanged verbal barbs for more than a day in Taiwanese-controlled waters before the Chinese vessel left The Taiwanese and Chinese coast guards had a standoff near the strategically located Pratas Islands (Dongsha Islands, 東沙群島) in the north of the South China Sea, the Coast Guard Administration (CGA) said yesterday. The two sides engaged in intense radio exchanges over sovereignty claims during the 33-hour standoff. China Coast Guard vessel 3501 eventually left the restricted waters, 26.6 nautical miles (49.2km) west of the Pratas Islands, at 5pm yesterday, the CGA said. Lying approximately between southern Taiwan and Hong Kong, the Taiwan-controlled Pratas are seen by some security experts as vulnerable to Chinese attack due to their distance — more than
WARNING: China should stop engaging in actions that undermine regional peace and stability, as it would only build resentment among people across the Strait, the CGA said China has deployed more than 100 navy, coast guard and other vessels in waters from the Yellow Sea to the South China Sea and the western Pacific since US President Donald Trump and Chinese President Xi Jinping (習近平) met in Beijing, National Security Council Secretary-General Joseph Wu (吳釗燮) said yesterday. “In this part of the world, #China is the one & only PROBLEM wrecking the #StatusQuo & threatening regional peace & stability,” Wu wrote on X. In a separate post, he said Beijing was coercing Taiwan’s maritime domain, calling it illegal and provocative, after the Coast Guard Administration (CGA) expelled a
RSS