The coronavirus COVID-19 that originated in China may be the last straw that finally has triggered American companies to exit China. In the Global manufacturing consulting firm Kearney’s seventh annual Reshoring Index released on Tuesday, co-author Patrick Van den Bossche writes:

Three decades ago, U.S. producers began manufacturing and sourcing in China for one reason: costs. The trade war brought a second dimension more fully into the equation―risk―as tariffs and the threat of disrupted China imports prompted companies to weigh surety of supply more fully alongside costs. COVID-19 brings a third dimension more fully into the mix­, and arguably to the fore: resilience―the ability to foresee and adapt to unforeseen systemic shocks.

As Kenneth Rapoza writes in Forbes, the Kearnsey report revealed a “dramatic reversal” because domestic U.S. manufacturing in 2019 outdid 14 Asian exporters tracked in the study. Rapoza notes succinctly, “Manufacturing imports from China were the hardest hit.”

Rapoza opines that other nations in southeast Asia and Mexico may become primary target spots for American companies. He adds, “The new SARS coronavirus has literally closed the economies of the Western world and created a public relations nightmare for China.”

The Kearney report states that companies “will be compelled to go much further in rethinking their sourcing strategies, (and) their entire supply chains.” – READ MORE

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