- President Donald Trump offers both incentives and threats in effort to get American companies to move manufacturing out of China
- In a recent survey, less than 4 percent of responding American companies with operations in China say they are moving some production to the United States
- Companies begin to diversify production and supply chains due to COVID-19, but U.S. remains a lower ranked choice
At a recent press conference, President Donald Trump clarified a longstanding aspiration to increase manufacturing in the United States by saying he wanted the nation to “end [its] reliance on China once and for all.” Trump proposed that companies keeping their manufacturing operations in the U.S. receive tax credits, while those relying on China for manufacturing would be subject to tariffs and ineligible for federal contracts.
Yet a recent survey of American businesses that own or outsource manufacturing operations in China found that a majority do not intend to relocate these operations. Seventy percent said they have no plans to shift their production outside of China, and just 3.7 percent said some of their operations were being moved from China to the U.S.
While the COVID-19 pandemic has prompted many companies to diversify their production, Southeast Asia and India have been more popular destinations for relocating operations. Companies have also been more likely to consider “near shoring” operations in Mexico and other North American countries to shorten supply lines to the U.S.
