“Given the high costs of shipping relative to value, it is not feasible to make excavators, front-end loaders, and similar products in the United States and then export them to China,” says Nicholas R Lardy, Anthony M Solomon Fellow at the Peterson Institute for International Economics.
As the US and its allies increasingly come to view China as a threat, businesses have increasingly been advised by these governments to “quit China”. Yet such a request is easier said than done — with China still one of the largest consumer markets in the world, business owners are loath to leave China. These are likely to double down on production in China in order to continue producing for the growing consumer market there.
For many of these firms, due to the sheer nature of the business they are in, it simply does not make sense to produce back in the US and then sell to China. For example, US-based heavy machinery Caterpillar operates more than 30 plants in China, producing for the local market.
