Aug 19, 2019

Massive companies won't pull out of China

Illustration: Lazaro Gamio/Axios

A top executive of a U.S.-based multinational is pushing back hotly against a White House official's assertion that companies are preparing to pull production out of China as part of President Trump's squeeze there.

The state of play: On ABC's "This Week," White House trade adviser Peter Navarro said that during an Oval Office meeting with a group of executives, "We heard from these business leaders: ... 'Just give us some time to December 15th. And, by the way, we are taking all of our sourcing production facilities out of China, and we will continue to do that.'"

Yes, but ... A source at a major U.S.-based company with a supply chain in China tells Axios:

  • "This is completely made up. ... The supply chains companies of all stripes have built up in China took decades to create. No one in their right mind is going to show up and say they’re taking 'all' of their supply chains out of China simply to please DJT."

A former administration official explains: "You can’t site and build factories, train workers, etc., on a dime. And the investments required are enormous, so companies usually wait for certainty in conditions before taking such big steps."

Go deeper: Allies worry Trump is "running out of tools" to boost the economy

Go deeper

U.S. companies aren't leaving China for America, despite what Trump says

Reproduced from US-China Business Council Member Survey, 2019; Chart: Axios Visuals

13% of American companies with operations in China have moved or plan to move all or part of their business out of China, but only 3% plan to relocate those operations to the U.S., according to a survey of 220 members of the U.S.-China Business Council. Members include companies like Walmart, Caterpillar and Apple.

Why it matters: It undercuts White House arguments that the trade war with China is causing U.S. companies to return home. In fact, a larger percentage planned to relocate from China to the U.S. in 2015. One caveat is that the survey was done in June, before the recent tariff escalations.

Keep ReadingArrowAug 29, 2019

Trump says he is "the chosen one" to take on China in trade war

Speaking to reporters outside the White House Wednesday, President Trump looked to the sky and proclaimed "I am the chosen one" while arguing that "somebody" had to take on China over their unfair trade practices.

Go deeperArrowAug 21, 2019

Trump's call for companies to leave China is easier said than done

Photo: Twitter

President Trump may be serious about trying to push U.S. companies out of China, but businesses have already seen that getting out is easier said than done.

Driving the news: In renewing his call for companies to leave China in recent tweets, Trump cited the International Emergency Economic Powers Act of 1977, a law that was passed to allow a president to isolate rogue or criminal regimes.

Go deeperArrowAug 26, 2019