President Donald Trump’s trade war is causing American manufacturers serious problems in China. Their only resolution some see, is to move production to Mexico, The New York Times reported Thursday.
Trump’s goal of bringing manufacturing jobs back to the United States still isn’t yielding the results he promised during the 2016 campaign. Now as the president begins his 2020 reelection with the slogan, “Promises Made, Promises Kept,” Trump seems to be scrambling to find solutions.
“Everyone was saying: ‘Oh, it’s a negotiating tactic. It won’t last long,’” ControlTek owner Andy LaFrazia recalled.
One year later, however, Trump is looking to charge bailouts on the American credit card instead of finding a resolution. So, LaFrazia is being forced to rewrite contracts and pass costs onto the company’s customers. Supply chains for the company are being switched from China and even redesigning their products to avoid Chinese electrical components.
“We’re very much at the end of the whip getting thrown around,” LaFrazia told The Times.
The report went on to say that evidence is “mounting” as a warning that the economy might be reaching its limit. Trump’s own government data shows imports slowed in April. “The bond market in recent days has been sending signals that the trade war could be a threat to growth in the United States and globally,” The Times warned.
The trade war is prompting a corporate trend, the report noted.
“In a recent survey of more than 200 corporate executives by the consulting firm Bain, 42 percent said they expected to get materials from a different region in the next year, and 25 percent said they were redirecting investments out of China,” the report said. “More companies are likely to follow suit in coming weeks after the Trump administration moved to limit business with Huawei, the Chinese telecommunications giant, which the White House sees as a security threat.”
Many companies were nervous about leaving long-term supplies simply because of Trump’s trade war. One year later, however, some are reexamining that decision.
GoPro is one company that shifted some production from China to Mexico. Universal Electronics made the move last year. Varex Imaging announced in May it began working “redirect our supply chain away from China.” All was in response to Trump’s trade war.