The move will also see new tariff introduced to penalise the country over its handling of the coronavirus pandemic, officials close to US planning revealed. US President Donald Trump has repeatedly said he would bring manufacturing back from China.
“We’ve been working on (reducing the reliance of our supply chains in China) over the last few years but we are now turbo-charging that initiative,” Keith Krach, undersecretary for Economic Growth, Energy and the Environment at the State Department told Reuters.
“I think it is essential to understand where the critical areas are and where critical bottlenecks exist.”
He added that the move was key to US security and one the administration could reveal new plans for soon.
The US Commerce Department, State and other agencies are exploring alternatives to withdraw sourcing and manufacturing from China.
Potential measures to start the change include tax incentives and re-shoring subsidies.
“There is a whole of government push on this,” said one.
Trump’s policy on China has been shaped by behind-the-scenes strives between pro-trade officials and China adversaries; now the latter say their time has come.
“This moment is a perfect storm; the pandemic has crystallised all the worries that people have had about doing business with China,” said another senior US official.
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“All the money that people think they made by making deals with China before, now they’ve been eclipsed many fold by the economic damage” from the coronavirus, the official said.
Trump has repeatedly claimed that he could put new levies in addition to the up to 25 percent tax on $370 billion in Chinese products currently in place.
US businesses, which pay the tariffs, are already complaining about the existing tariffs, especially as sales drop during the pandemic crisis.
However, Trump will not hesitate to introduce new ones, officials say.
Other ways to penalise China may include sanctions on officials or firms.
A better relation with Taiwan, the self-governing island China considers a province, are also being considered.
Commerce on Monday initiated a national security investigation that could lead to new US tariffs on imports of key elements of power transformers.
Commerce claimed it needed guaranteed domestic access to such imports to be able to act to power disruptions.
The US is striving to create an alliance of “trusted partners” dubbed the “Economic Prosperity Network,” one official said.
It would involve businesses and civil society associations working under the same set of standards on everything from digital business, energy and infrastructure to research, trade, education and commerce, he said.
“The U.S. government is working with Australia, India, Japan, New Zealand, South Korea and Vietnam to “move the global economy forward,” Secretary of State Mike Pompeo said April 29.
These discussions include “how we restructure … supply chains to prevent something like this from ever happening again,” Mr Pompeo said.
China overtook the United States as the world’s top manufacturing country in 2010, and was in charge of 28 percent of global production in 2018, according to United Nations figures.
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