The pandemic’s impact on economic relations with China

Joel Gehrke of the Washington Examiner reports on one potential economic impact of the COVID-19 pandemic.

American companies that produce essential goods in China should plan to shift their operations back to the United States or other Western countries, according to a senior Republican lawmaker.

“We’re staring into a significant, significant crisis of supply chain,” Colorado Sen. Cory Gardner told the Washington Examiner. “Cheap labor or cheap manufacturing be damned if you are reliant on them for your life and livelihood.”

Gardner’s warning was spurred by the shortage of hospital masks in the United States, a dearth driven by Beijing’s refusal to allow American companies that make the products in China to ship them out of the country amid the coronavirus pandemic. And he’s not alone in that sentiment, raising the possibility that anger over China’s self-interested response to the coronavirus outbreak could produce one of the most dramatic alterations of global economics in decades.

“Because of the coronavirus problem, people are recognizing that any supply chain that has single points of failure is incredibly vulnerable,” the Heritage Foundation’s Dean Cheng, a senior research fellow in the organization’s Asian Studies Center, told the Washington Examiner. “China is going to be very concerned about decoupling, offshoring, [or any] redirection of investments out of China.”

Chinese officials already have warned against such a shift, in response to White House officials who share Gardner’s views. “Such an attempt is by no means the right prescription amid the pandemic, still less a viable way out for domestic problems the U.S. faces,” Chinese Foreign Ministry spokesman Geng Shuang said last week. “It will only cause greater damage to the innocent American people.”

Mitch Kokai / Senior Political Analyst

Mitch Kokai is senior political analyst for the John Locke Foundation. He joined JLF in December 2005 as director of communications. That followed more than four years as chie...

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