Xinhua News Agency, Washington, August 20 Report: Supply chains are not "plug and play" and cannot satisfy the "fantasy" of US trade policy

Xinhua News Agency reporter Gao Pansun Ding

"Supply chains are not "plug and play" and they cannot be easily reconfigured to satisfy the "fantasy" of US trade policy." At a hearing held by the Office of the United States Trade Representative in Washington on the 20th on the proposed tariff increase on $200 billion of Chinese exports to the United States, Edward Brzytwa, director of international trade at the American Chemistry Council, poured cold water on the US government's attempt to forcibly move the supply chain back to the United States by imposing tariffs.

"The manufacturing supply chain does not exist in a vacuum, but follows the changes of market forces. It is very complex and relies on interconnected networks and channels to bring finished products to market. Therefore, it is vulnerable to the destructive effects of tariffs and non-tariff barriers," Brzytwa explained. "Forcing companies to reconfigure their supply chains will threaten their survival."

Brzytwa, who attended the hearing on behalf of US chemical manufacturers, expressed deep disappointment that the US government did not listen to the association's advice in July. At that time, the association suggested excluding about $2.2 billion worth of chemical and plastic products imported from China from the tax list. He warned that if the US government continues to push forward its plan to impose tariffs on China, about $16.4 billion worth of chemical and plastic products imported from China will face tariff increases, which may have an "irreversible" impact on the US chemical industry. At the same time, China's countermeasures against US chemical products will also cause the US chemical industry to lose the Chinese market. "We reiterate in the strongest terms that the best way to protect the interests of the US chemical industry and the entire manufacturing industry is to withdraw chemical products from the forefront of the trade war," said Brzytwa. Like Brzytwa, representatives from many industries in the United States, including semiconductors, bicycles, clothing, and luggage, also emphasized that it is very difficult to move production lines out of China, let alone move them back to the United States, because China has accumulated rich manufacturing experience over the years and established an efficient and mature supply chain network.

Stephen Lang, president of the American Bridal Gown Industry Association, said that China's dominance in the field of clothing production means that the United States is almost inevitably importing clothing products from China, especially wedding dresses, which can no longer be produced in the United States. The United States not only lacks fabric supply, but also lacks production skills at all levels.

Lang, who is also the owner of a clothing company, pointed out that the characteristics of fashion products make it impossible for clothing importers to stockpile large quantities of goods before any potential tariffs take effect, which means that if a 25% tariff is imposed on imported wedding dresses, suppliers, importers and consumers will be forced to share higher costs, and he will move his clothing company out of the United States.

Stephen Lamar, senior vice president of the American Apparel and Footwear Federation, also said that no country has the ability to commercially produce a wide range of products like China, and 80% of the headwear sold in the US market comes from China.

He pointed out that given China's dominant market position, the 25% tariff on headwear imported from China means that the price of headwear imported from other countries will also increase. Headwear is not a necessity, and consumers are bound to be unwilling to bear higher prices. Therefore, American companies that import and sell headwear will be severely impacted. He reiterated that the association opposes the United States' imposition of tariffs on textiles, travel goods, headwear and other products imported from China.

Ross Bishop, the owner of an American travel bag manufacturer, told Xinhua reporters after the hearing that he had tried to cooperate with a Vietnamese factory, but later found that the production cost was getting higher and higher. In the end, he decided to continue to cooperate with Chinese suppliers because Chinese suppliers not only have exquisite manufacturing technology, but also have the highest cost-effective products. He accused the United States of "playing political games" by imposing tariffs on travel bags imported from China because imported travel bags do not pose a national security threat to the United States.

The hearing was the first of a series of six-day hearings on tariff policies on China held by the Office of the United States Trade Representative. More than 60 industry associations and corporate representatives attended the hearing, explaining the impact of the additional tariffs on Chinese imports on each of them, and expressing their willingness to exclude their own companies or products from the tax list.

Officials from the Office of the United States Trade Representative and other government departments asked questions after each group of representatives finished their testimony. The reporter observed at the scene that the most common question asked by US government officials was whether they could find alternative sources of imports of Chinese goods. The answers of the delegates were relatively concise and consistent: "It's difficult" or "No."

"A bicycle has more than 200 different parts. It takes many years and a lot of money to transfer the production site. It is even more difficult to transfer production to the United States." Bob Majivicius, director of the American Bicycle Products Suppliers Association, told reporters that the manufacturing industry attaches importance to clusters. For the bicycle industry, China is the location of clusters, with obvious scale effects, outstanding advantages in cost, efficiency, and labor. About 94% of the imported bicycles in the United States come from China.

Jonathan Davis, vice president of the Semiconductor Industry Association, said that given the globalization of the supply chain, the US tariffs on Chinese semiconductor products will also affect US semiconductor manufacturers with Chinese operations. He pointed out that the imposition of tariffs will cause US semiconductor manufacturers to increase production costs, reduce the price competitiveness of products sold overseas, and reduce exports, which will lead to reduced corporate R&D investment, and ultimately hinder US innovation and job creation.

The US Chamber of Commerce, the largest business lobbying organization in the United States, also stated in written testimony submitted a few days ago that the imposition of tariffs on an additional $200 billion in Chinese goods will "significantly expand" the harm to US consumers, workers, businesses and the economy, and "the number of written opinions and on-site testimonies submitted to the US Trade Representative opposing the Trump administration's tariff policy fully illustrates the harm that additional tariffs will cause."

"Now is the time to engage in serious consultations with China to find solutions and prevent further damage to the lives of the American people." The US Chamber of Commerce concluded.

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