Afternoon Coffee: U.S. Threatens Additional China Tariffs of $200 Billion, Reshoring Remains Unpalatable for Many Manufacturers

AdobeStock/Nongnuch Leelaphasuk

The Trump administration said Tuesday it would impose tariffs on roughly $200 billion worth of Chinese fish, petroleum, chemicals, handbags, textiles and other products without trade concessions from the Chinese government, the New York Times reports. China responded with threats of its own retaliatory tariffs. President Trump has said he is prepared to tax as much as $450 billion worth of Chinese products.

Reshoring Study 

A new report from A.T. Kearney suggests that manufacturers are not considering returning manufacturing back to the U.S. among their options for navigating a difficult trade landscape, according to The Wall Street Journal. Experts said that while that situation could change over the longer term, for the time being low-skilled, labor-intensive manufacturing operations are likely to remain in countries where labor costs are low.

Auto Supplier Strike  

Truck and engine manufacturer Scania has failed to meet thousands of orders due to a strike at an unnamed supplier of cast engine components, Automotive Logistics reports. The strike, which began on June 14, has motivated Scania’s purchasing organization to optimize its supply chain so the company can avoid further disruptions.

Small Businesses Confidence 

And finally, an economic update: Small-business owners’ confidence fell from May to June, CNBC reports, as more than a third are struggling to find workers for open jobs. Some 21% of small business owners cited trouble finding qualified workers as their most important business problem.

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First Voice

  1. Sandy Montalbano:

    AT KEARNEY’S REPORT ON RESHORING: SOME RIGHT, SOME WRONG

    A.T. Kearney’s Reshoring Index does not actually measure reshoring.

    It essentially uses the trend in imports to imply a trend in reshoring. According to the Reshoring Initiative, their report got some points right but other points clearly wrong.

    They are wrong about the decline of reshoring in 2017. It actually increased about 50% from a 2016 record. Kearney’s Index is a direct measure of U.S. imports which are clearly too high, not a measure of reshoring which is one of many factors that influence the level of imports and has kept imports from growing more.

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