Paul Berger of The Wall Street Journal reports that U.S. companies are pulling away from China as Democrats and Republicans increasingly impose duties on Beijing. They write:
Until a few years ago, Chinese factories supplied the world with Sharpie retractable pens and Oster blenders.
No more.
Consumer giant Newell Brands now makes those products, and more, at its own plants in the U.S. and Mexico. Many of its other products are made in factories in Vietnam, Indonesia and Thailand.
Chris Peterson, Newell’s chief executive, said the company’s shift reduces its dependence on China at a time when both the Democratic and Republican parties “are getting more protectionist in terms of trade policy.”
Tariffs are becoming an entrenched tool tying together geopolitics and trade, and they are playing a bigger role in long-term manufacturing and sourcing decisions. Nowhere are they hitting harder than in China, where importers and exporters are navigating an increasingly complicated regime of levies on goods ranging from semiconductors to mattresses. […]
Robinson said for every dollar the government adds in tariffs, consumers pay an extra $2 to $4 at the checkout. “The reality is that you and I are paying for the tariffs as part of the ticket price when you go into the store and buy,” he said. […]
Peterson said just 15% of Newell’s goods rely on products made in China today, down from more than 30% several years ago. He expects that by the end of next year the share will fall below 10%.
He said that when the company is searching for new Chinese suppliers one of its first questions is whether they have capacity or plan to add capacity outside the country.
“If a supplier doesn’t have manufacturing capability outside of China, we will not select them as a vendor for us,” he said.
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