Commentary: Postelection U.S.-China Trade Relations May Not Take the Expected Path
31 Octubre 2020 - 5:29AM
Noticias Dow Jones
By Yossi Sheffi
The Trump administration's aggressive stance toward China has
compounded uncertainty on U.S.-China trade relations. In
considering how the presidential elections may affect the flow of
international trade, companies should avoid the accepted
wisdom.
Business leaders should keep in mind that the trans-Pacific
trade war hasn't curtailed export shipments to the degree many
feared. As The Wall Street Journal reported recently, China's
exports to the U.S. were down by only 3.6% in the first eight
months of 2020, even while global trade was being thrown for a loop
by coronavirus lockdowns.
Much of this business was driven by surging exports of items
needed to combat the Covid-19 pandemic. This is despite the recent
outcry that the U.S. relies too much on China for vital supplies
such as personal protection equipment. In fact, global demand for
PPE and other virus-related goods is helping China offset declines
in exports of other goods.
Assumptions the Covid-19 pandemic and deteriorating U.S.-China
trade relations would trigger an exodus of U.S. companies from
China also have been off the mark.
Trump administration officials joined this bandwagon, arguing
that a flight from China was imminent. "The fact is," Secretary of
Commerce Wilbur Ross said in late January as China was gripped by
the coronavirus, "it does give business yet another thing to
consider when they go through their review of their supply
chain...So, I think it will help to accelerate the return of jobs
to North America."
The exodus hasn't materialized. Although some companies --
notably those in labor-intensive industries -- left China before
the pandemic, the decision to leave involves multiple
considerations.
Many enterprises have good reasons to stay. For example, why
leave behind one of the world's richest markets? China has the
second-largest economy in the world and consumes about 20% of the
world's output. Companies in industries such as the technology and
automotive sectors are unlikely to abandon their investments in
sophisticated and highly integrated supply based in China any time
soon.
An American Chamber of Commerce survey in March 2020 found that
more than 70% of the companies in China had no plans to relocate
manufacturing, their supply chains or sourcing out of China because
of the pandemic.
It is tempting to assume President Trump in a second term would
double down on his trade war with China, leading more companies to
reconsider their Chinese operations in the face of even greater
volatility.
In contrast, it is easy to expect a Joe Biden victory to pave
the way for more stability and perhaps even normalized relations
between the two trade giants.
However, anti-China sentiment might be the only thing Democrats
and Republicans have in common. China may have reason to fear a
Biden administration more than the return of their Republican
antagonist.
China, after all, has learned how to manage the Trump
administration's trade policies. However, a more thoughtful
approach from a President Biden could involve the creation of a
coalition involving the U.S., the European Union, Japan and other
large trading blocs.
Instead of going it alone -- the Achilles heel of the Trump
interventions -- Mr. Biden could wield the combined buying power of
these allies to pressure China into making meaningful changes in
sensitive areas such as international property theft.
Such changes could profoundly affect Chinese manufacturing and
supply chains.
The bottom line is to expect the unexpected when evaluating
U.S.-China trade outcomes.
Yossi Sheffi is director of the Massachusetts Institute of
Technology's Center for Transportation & Logistics. His most
recent book is, "The New (Ab)Normal: Reshaping Business and Supply
Chain Strategy Beyond Covid-19."
(END) Dow Jones Newswires
October 31, 2020 07:14 ET (11:14 GMT)
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