Coronavirus, US-China trade war see 95 per cent of American firms wanting to ditch Chinese suppliers

Name: China’s ‘malign foreign influence’ campaign targets US, says FBI director Wray
Uploaded: 2020-07-10T09:30:12.000Z
Duration: 51 s
Description: China’s ‘malign foreign influence’ campaign targets US, says FBI director Wray

A Qima poll of 200 companies with global supply chains found that 95 per cent of US respondents planned to change to suppliers outside China

Coronavirus, trade war and the US-China rivalry are souring business ties, but firms have been warned that shifting suppliers is easier said than done

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China’s industrial base has recovered strongly from its coronavirus shutdown in the first two months of the year, while many alternative markets are still struggling to contain their outbreaks and return to work. Photo: EPA-EFE

Finbarr Bermingham

Published: 5:30pm, 10 Jul 2020Updated: 11:29pm, 10 Jul 2020

Jaded by two years of trade war tariffs, worried by the disruptive coronavirus pandemic and anxious about the crumbling US-China relationship, a vast majority of American buyers are looking to shift their supplier base away from China, new research shows.

But with much of the world still under some form of lockdown, and with few markets able to compete with China on cost or quality, sourcing specialists have warned US firms that switching is “not like flipping a switch”.

A poll of 200 companies with global supply chains conducted by sourcing specialists Qima in June found that 95 per cent of respondents in the United States planned to change suppliers away from China, due to the confluence of current issues and the uncertainty of future trading patterns.

The same survey found that fewer than half of European Union respondents had immediate plans to shift their sourcing, suggesting that the crux of the problem lies in the US-China rivalry.

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The trend is not new as firms have been seeking lower-cost alternatives to China for years, with many scrambling to join the exodus when tariffs first hit in July 2018.

But the survey suggests a sharp uptick in demand among big American companies for goods not made in China, as the superpower relationship goes from bad to worse.

The irony is that China’s industrial base has recovered strongly from its coronavirus shutdown in the first two months of the year, while many alternative markets are still struggling to contain their outbreaks and return to work.