US-China trade dispute urges US factories to relocate during next year

By Sean Galea-Pace
The US-China trade dispute is encouraging American multinational firms to move their factories and adapt business strategies during the next 12 months...

The US-China trade dispute is encouraging American multinational firms to move their factories and adapt business strategies during the next 12 months, according to CNBC.

Speaking to CNBC’s Squawk Box, Gerry Mathios, vice president of consulting firm Bain, said: “The shift is happening. Back at the end of 2018, when we ran a similar report, we found out a lot of companies — over 50% — were actually sitting on the fence ... there were no major actions taken.”

Despite China’s significant cost advantage that saw them rise to the top of the world’s manufacturing hub, it is believed that advantage is decreasing due to costs rising.

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Following a survey by Bain and Company which polled over 200 high-level executives and senior supply chain officers at US multinationals with operations in China, 60% of respondents confirmed they are ready to take action.

“They see customers having to pay part of it, and they are trying to see how to reassess their supply chains,” added Mathios.

It is expected that some manufacturing will remain in China as the country transitions to becoming a consumption-driven economy.

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