Unionwear is a big believer in reshoring manufacturing from foreign countries — especially China — back to the USA. Obviously, it is good for the US to create more jobs. But it’s also good for business. Supply chain disruptions have crippled businesses for over two years and there is no sign of slowing, especially given the sorry state of US-China relations, and companies should get started bringing manufacturing back to the US before they find themselves in a predicament they can’t easily get out of. Freightwaves has a lengthy article on this very topic, highlighting a combination of covid, Taiwan, and Chairman Xi’s approach to business.

The most immediate impact to supply chains in Chinese president Xi Jinping’s third term will feature his signature zero-COVID policy. China’s draconian surveillance and control regime of tests, quarantines and lockdowns seemed to work well enough for a year. Xi’s policy held down infection rates and kept the economy pointed up and to the right.

When the Omicron variant’s greater infectiousness overwhelmed mask and vaccine protections, China kept forcefully applying lockdowns, massively disrupting both its own economy and trans-Pacific trade in general. The consensus of the international financial community is that China’s zero-COVID policy under Omicron has been a disaster casting a pall over the global economy.

But whether or not Xi rolls back his zero-COVID policy or not, the future of the trans-Pacific is troubled. For instance, former President Donald Trump’s tariffs set off panicked behavior by U.S. importers that roiled the trans-Pacific. Companies accelerated the timelines on their purchase orders, “pulling forward” shipments that were originally scheduled to arrive after new tariffs took effect in order to avoid paying the duties. A logjam of volume increased rates, reduced schedule reliability, congested ports and filled warehouses, especially in Southern California.

And that’s just the beginning of our troubles. In fact, we believe tensions between our two countries will likely continue into the near future, leaving open the question of whether American firms can still trust China as a reliable partner. In the near-term, we believe the answer is no.

Read more at the article here.