Report: American Companies Leaving China In Huge Numbers, And Coronavirus Is Speeding It Up Even More

The coronavirus pandemic may actually result in something positive: American companies are returning their manufacturing back to the United States.

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Kearny, a global manufacturing firm, released a report this week showing American manufacturing companies are leaving China in huge numbers, with many doing so because of the ongoing trade war with China and the communist regimes utter failure to contain COVID-19 after unleashing it on the global community.

Patrick Van den Bossche, a Kearney partner who co-authored the report, wrote:

Global manufacturing consulting firm Kearney released its seventh annual Reshoring Index on Tuesday, showing what it called a “dramatic reversal” of a five-year trend as domestic U.S. manufacturing in 2019 commanded a significantly greater share versus 14 Asian exporters tracked in the study. Manufacturing imports from China were the hardest hit.

Last year saw companies actively rethinking their supply chain, either convincing their Chinese partners to relocate to southeast Asia to avoid tariffs, or by opting out of sourcing from China altogether.

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.

Indeed, the report indicated a "dramatic reversal" of a five-year trend in 2019 showing U.S. export its manufacturing.

Last year, U.S. production "2019 commanded a significantly greater share versus the 14 Asian low-cost countries," the report said. Hardest hit was and continues to be China.

In addition to returning production to the states, U.S. companies are also moving their manufacturing sites to southeast Asian countries and Mexico, the report said.

"The lessons we must learn from COVID-19 are as momentous as they are harsh. While the trade war triggered some notable tinkering, the massive operational disruption wrought by the coronavirus pandemic will compel companies to fundamentally rethink their sourcing strategies," the report said. "At minimum, we expect they will be increasingly inclined to spread their risks rather than put all their eggs in the lowest cost basket, as many long did in China."

Lawmakers are even introducing initiatives to end American reliance on China in the wake of the COVID-19 pandemic.

For example, Tennessee Republican Sen. Marsha Blackburn is planning to introduce a major bill in the coming days that will not only take dead aim at China, but will also demand that drug manufacturing be brought back to the United States.

During a Thursday interview on SiriusXM’s Breitbart with host Alex Marlow, Blackburn slammed China for its role in spreading the coronavirus, which has killed thousands around the world and holding the United States hostage by controlling the global drug supply.

Blackburn went on to say that China’s control of the global drug supply and it using it against its enemies, including the United States, has been put in the spotlight after the coronavirus took root in Central China before spreading around the world.

“China caused this,” Blackburn said. “They withheld the information. They erroneously blamed it on the United States Army.”

“We should hold them to account for what they have caused — that created a global pandemic and destabilized the health and the financial systems and the food supply of people all over the globe,” Blackburn said.

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The United States should also, Blackburn said, put a halt to its dependence on China by bringing the manufacturing of pharmaceuticals back to this country.