The Trump administration announced that it is willing to pay US companies that would retract their supply chains from China into the US. The president's top economic adviser claims that the country wishes to be less dependent on Asia for production, goods, and critical technologies.
Last Tuesday, the chief White House economic adviser Larry Kudlow told Fox Business that the US government welcomes American companies that would revert their supply chain to the US from Hong Kong and mainland China.
Trade tensions between China and the US have been escalating in recent months. The economic slowdown caused by the pandemic also caused supply chain disruptions globally. This elevated the concerns of US to become less reliant on Asia on production for goods and critical technologies.
At present, China is the world's largest producer of medical equipment used by frontliners during the pandemic. These include face masks, COVID-19 test kits, and other medical equipment used to protect against contamination.
Kudlow then claimed that the US would cover expenses and pay the costs of American companies looking to move their supply chains and production back home. The compensation would cover those who operate in mainland China and Hong Kong.
Tensions between China and the US has been escalating. Last week, Beijing also moved to tighten trade relations in Hong Kong when it instituted a national security bill that would bypass the city's lawmaking body. The said mandate would effectively end the "one country, two systems" principle that governs Hong Kong.
Kudlow then added that China made a mistake when it heightened the parameters and judgments about Hong Kong's national security. He then added that the move manifested that China wants Hong Kong to have a unified system with the mainland. However, Kudlow did not wish to speculate on China's approach with Hong Kong. He pointed out that this would jeopardize the current phase one of the China-US trade deal.
Kudlow then revealed that US trade representative Robert Lighthizer and Chinese vice premier Lou He engaged in 'constructive' talks regarding phase one of the China-US trade deal. He further said that the agreement remains in force for now.
Last week, Chinese government officials announced that the National People's Congress (NPC) will review legislation that would punish anti-government movements in Hong Kong. According to the US press secretary Kayleigh McEnany, US President Donald Trump is displeased with China's efforts towards Hong Kong.