Author: CensorBiz

 The Ukraine war and COVID-19’s continued fallout delivered more grim economic news Wednesday, with the Paris-based Organization for Economic Cooperation and Development sharply lowering its global growth forecast and predicting rising inflation.  The poorest people and countries may suffer the most.  

The OECD slashed its global growth forecast to 3% this year — down from 4.5% the organization predicted only a few months ago. It estimates growth will slow even further in 2023.  

The main culprit: Russia’s invasion of Ukraine.  

“As a result of Russia’s war, global growth will be lower, and inflation will be higher for longer,” said OECD Secretary-General Mathias Cormann.  “Both business investment and private consumption growth have been hit, and the war has further exacerbated supply chain disruptions previously brought on by the pandemic, which is pushing up energy and food prices and causing significant price volatility.”  

Representing 38 mostly developed countries, the OECD predicts the U.S. and Eurozone economies will grow by just 2.5% and 2.6% respectively this year — also down sharply from earlier forecasts.

Even China, handicapped by zero-COVID policies and vaccine shortages, will see its economy growing just 4.4% in 2022, compared to a previously forecasted 5.1%. Its slowdown is expected to put a further brake on global growth.  

But the OECD’s chief economist Laurence Boone says the world’s poorest countries are the biggest worry.  

“We’re very concerned about the food situation in low-income countries. The war is really sending shockwaves all the way to Africa and the Middle East,” she said.

Many of these countries depend on wheat from Ukraine and Russia to feed their people.  

“The war could spark starvation. It could cause social unrest and political turmoil,” she said.

The OECD’s forecast follows equally dark global outlooks by both the World Bank and the International Monetary Fund.  

The Paris-based body advises a raft of measures to turn around the trajectory, including more aid to developing countries and more global cooperation. Also key: investing in green energy to end dependence on countries like Russia, a key exporter of fossil fuels.  
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The World Bank on Tuesday said the world is entering “a protracted period of feeble growth and elevated inflation,” as it cut global growth forecasts by 1.2% to 2.9% for 2022.

The bank added that many countries are likely to face recession.

The bank blames the COVID-19 pandemic for most of the problem and said the Russian invasion of Ukraine is also a factor.

“The danger of stagflation is considerable today,” World Bank President David Malpass wrote in the foreword to the report. “Subdued growth will likely persist throughout the decade because of weak investment in most of the world. With inflation now running at multi-decade highs in many countries and supply expected to grow slowly, there is a risk that inflation will remain higher for longer.”

The bank thinks global growth will hover around 3% in 2023 and 2024, with inflation remaining high in many economies.

Growth in the U.S., the bank said, would only be 2.5% this year, down from 5.7% last year.

Europe would also see growth of 2.5% compared to 5.4% last year, the bank predicted.

China was expected to grow 4.3% this year, down from 8.1% last year, the bank said. It blamed the country’s draconian COVID-19 lockdowns for the slowed growth.

Some information in this report comes from The Associated Press and Reuters.
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White House says summit of American states will make progress despite boycotts by Mexican president and others over refusal to invite Cuba, Nicaragua, Venezuela
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At a lunch for Tony Award nominees last month, veteran theater producer Ron Simons looked around and smiled. It seemed appropriate that the gathering was held at The Rainbow Room. 

“I can guarantee you I have not seen this many people of color represented across all categories of the Tony Awards,” he recalled. “It was a diverse room. I was so uplifted and impressed by that.” 

For the first full season since the death of George Floyd reignited a conversation about race and representation in America, Broadway responded with one of its most diverse Tony slates yet. 

Multiple Black artists were nominated in every single performance category, including three of five featured actors in a musical, four of six featured actresses in a play, two of seven leading actors in a play and three of five leading actresses in a play. There are 16 Black performance nods out of 33 slots — a very healthy 48%. 

By comparison, at the 2016 Tonys — the breakout season that included the diverse “Hamilton,” “Eclipsed” and “The Color Purple” revival — 14 of the 40 acting nominees for plays and musicals or 35% were actors of color. 

“Let’s hope that the diversity that we saw in the season continues to be the norm for Broadway, that this isn’t just an anomaly or a blip in reaction to what we’ve been through, but just a reset,” said Lynn Nottage, the first writer to be nominated for both a play (“Clyde’s”) and musical (“MJ”) in a single season. 

The new crop of nominees also boasts more women and people of color in design categories, such as first-time nominees Palmer Hefferan for sound design of a play (“The Skin of Our Teeth”), Yi Zhao for lighting design of a play (“The Skin of Our Teeth”) and Sarafina Bush for costume design of a play (“for colored girls who have considered suicide/when the rainbow is enuf”). 

Other firsts this season included L Morgan Lee of “A Strange Loop” becoming the first out trans performer to be nominated for a Tony. Adam Rigg, scenic designer of “The Skin of Our Teeth,” became the first out agender (does not identify with a particular gender) designer nominated, and Toby Marlow, “Six” co-creator is the first out nonbinary composer-lyricist nominated. 

Eleven performers — including Jaquel Spivey from “A Strange Loop,” Myles Frost in “MJ” and Kara Young from “Clyde’s” — received a nod for their Broadway debut performances and 10 designers received nominations for their Broadway debuts, as did creators such as “A Strange Loop” playwright Michael R. Jackson and “Paradise Square” co-book writer Christina Anderson. 

“I’m very, very excited about all the new voices we’re hearing, all the new new writers who are represented on Broadway for the first time,” said A.J. Shively, an actor nominated for “Paradise Square.” “I really hope that trend continues.” 

Perhaps nowhere is the diversity more apparent than in the oldest play currently on Broadway. “Macbeth,” directed by Sam Gold, has a Black Lady Macbeth in Ruth Negga, a woman taking on a traditional male role (Amber Gray plays Banquo), a non-binary actor (Asia Kate Dillon) and disability representation (Michael Patrick Thornton). 

“If all the world’s a stage, our stage certainly is the world. I’m really proud to be up there with all the actors,” says Thornton, who uses his wheelchair as a cunning asset to play the savvy nobleman Lennox. 

But while representation was seen across Broadway this season so was an invisible virus that didn’t care. The various mutations of COVID-19 sickened actors in waves and starved many box offices of critical funds. Skittish theater-goers who returned often had an appetite for only established, comfort shows. 

Several of the Black-led productions came up short, including “Thoughts of a Colored Man,” “Chicken and Biscuits,” and “Pass Over.” They debuted in the fall, just as Broadway was slowly restarting and audiences were most fearful. “Thoughts of a Colored Man” closed early because it didn’t have enough healthy actors, at one point enlisting the playwright himself to get onstage and play a role. 

One of the most painful blows was a revival of Ntozake Shange’s “for colored girls,” which struggled to find an audience. The cast of seven Black women included deaf actor Alexandria Wailes and, until recently, a pregnant Kenita R. Miller. It earned strong notices and a whopping seven Tony nominations. But it will close this week. 

“In past seasons, had there been a play with seven Tony nominations and this bevy of glowing reviews, the show would have gone on for quite a while,” says Simons, the lead producer. “There’s an audience for this show. That’s not the problem. The problem is getting the audience into the theater to see the show.” 

Despite a glut in inventory and not enough consumers, there were clear game-changers, like “A Strange Loop,” a musical about a gay Black playwright, that captured a leading 11 nominations, besting establishment options like a Hugh Jackman-led “The Music Man.” Broadway veterans agree that extraordinary storytelling was available for those hardy souls who bought tickets. 

“I’m really proud to be a part of one of the voices of Broadway this year,” said Anna D. Shapiro, who directed Tracy Letts’ Tony-nominated play “The Minutes,” which exposes delusions at the dark heart of American history. ” I am so impressed by the vitality and the dynamism.” 

Broadway data often suggest improvements one year, then a drop off the next. Take the 2013-14 season, which was rich with roles for African Americans, including “A Raisin in the Sun” starring Denzel Washington, Audra McDonald channeling Billie Holiday in “Lady Day at Emerson’s Bar & Grill” and the dance show “After Midnight.” 

There were also African Americans in nontraditional roles, like James Monroe Iglehart as the Genie in “Aladdin,” Nikki M. James and Kyle Scatliffe in “Les Miserables,” and Norm Lewis becoming the first Black Phantom on Broadway in “The Phantom of the Opera.” 

That season, Black actors represented 21% of all roles. But the next season, the number fell to 9%. 

Camille A. Brown, who this season together with Lileana Blain-Cruz became only the second and third Black women to be nominated for best direction of a play, has weathered the ups and downs. 

“My thing is, let’s see what the next year and the year after that and the year after that look like?” she says. “I think the landscape was definitely a challenge, especially after George Floyd and the events that happened after that. But this is only the first season out after all of that stuff happened. So let’s see if it keeps going and keeps evolving and keeps progressing.” 

Simons is optimistic the gains this year will last and celebrates that, at the very least, a group of diverse actors got their Broadway credits this season. He predicts more Tony winners of color than ever before. 

“Even though the box office hurt all of our feelings, it really is a celebration because never have we seen this kind of diversity happen on Broadway,” he says. “It is a rare year and it is a rare year for both the good and the bad.” 
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Lebanon said on Monday it would invite a U.S. mediator to Beirut to continue negotiations over a disputed maritime boundary with Israel to prevent any escalation after accusing Israel of encroaching on contested waters.

The issue flared up on Sunday when a vessel operated by London-based Energean ENOG.L arrived off the coast to develop a gas field which Israel says is part of its exclusive economic zone but which Lebanon says falls within the contested waters.

In Israel’s first response to the Lebanese accusation, Energy Minister Karin Elharrar said on Monday the Lebanese account was “very far from reality.”

Lebanon’s president and caretaker prime minister agreed to invite U.S. mediator Amos Hochstein to discuss “completing the negotiations to demarcate the southern maritime border and to work on concluding the issue as fast as possible to prevent any escalation that would not serve the state of stability in the region,” caretaker Prime Minister Najib Mikati said on his Twitter feed.

He said Lebanon would contact major powers and the United Nations to affirm its position, confirming that any Israeli drilling or exploration in the disputed area would be “a provocation and an act of aggression” that threatens peace and security.

The United States began mediating indirect talks in 2020 to resolve the issue.

Energean said its floating production storage and offloading vessel arrived on Sunday at the Karish field, about 80 km (50 miles) west of the city of Haifa, and it plans to bring it online in the third quarter.

In a statement on Sunday, the Lebanese presidency said Lebanon had sent a letter to the United Nations in recent weeks stating that Karish falls within the disputed area.

Elharrar told Tel Aviv radio 103 FM there was “unequivocally no” encroachment by Israel.

Lebanon is home to the heavily armed, Iran-backed Hezbollah group, which has previously warned Israel against drilling in the disputed area until the issue is resolved, and said the group would take action if it did so.

Asked about the prospect of escalation, Elharrar said: “We are not there at all. Really, such is the disconnect [between rhetoric and reality] that I do not believe they would take action.”

But she added: “Israel is making preparations [and] I recommend that no one try to surprise Israel.”

There has been no immediate U.S. comment.

Last year, Beirut expanded its claim in the disputed zone by around 1,400 square km (540 square miles).

Lebanon has yet to respond to an undisclosed proposal by the U.S. envoy earlier this year.
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President Joe Biden will use executive action on Monday to help bridge a solar panel supply gap and kickstart stalled U.S. projects after an investigation froze imports from key foreign suppliers, sources familiar with the matter said.

The moves come amid concern about the impact of the Commerce Department’s months-long investigation into whether imports of solar panels from four Southeast Asian nations are circumventing tariffs on goods made in China.

Biden also will invoke the Defense Production Act to drive U.S. manufacturing of solar panels and other clean technologies in the future, with the support of loans and grants, the sources added.

“There is going to be this safe harbor timeout on the … collection of duties, and that’s at the heart of what’s going to save all of these solar projects and ensure that they are going forward,” said one source familiar with the White House’s plans.

State governors, lawmakers, industry officials and environmentalists have expressed concern over the investigation, which could result in retroactive tariffs of up to 250%.

It has essentially halted imports from Cambodia, Malaysia, Thailand and Vietnam, which account for more than half of U.S. solar panel supplies and 80% of imports.

The investigation has had a chilling effect on the industry, say clean energy groups, some of which have asked Commerce Secretary Gina Raimondo to dismiss it, though she has said she has no discretion to influence it.

The source, who spoke on condition of anonymity, said Biden’s action would bring certainty back to the U.S. solar market and allay companies’ concerns about having to hold billions of dollars in reserves to pay potential tariffs.

The investigation, announced at the end of March, could take 150 days or more to complete.

The issue has created a unique dilemma for the White House, which is eager to show U.S. leadership on climate change, in part by encouraging use of renewable energy, while respecting and keeping its distance from the investigation proceedings.

Using executive action and invoking the DPA, which allows presidents some authority over domestic industries, allows Biden to take advantage of the tools available to him without stepping on the tariff inquiry.
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Job growth is strong, wages are up, but May inflation was 8.3%, down slightly from its decades-high of 8.5% reported in April 
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U.S. Commerce Secretary Gina Raimondo said on Sunday that President Joe Biden has asked his team to look at the option of lifting some tariffs on China that were put into place by former President Donald Trump, to combat the current high inflation.

“We are looking at it. In fact, the president has asked us on his team to analyze that. And so we are in the process of doing that for him and he will have to make that decision,” Raimondo told CNN in an interview on Sunday when asked about whether the Biden administration was weighing lifting tariffs on China to ease inflation.

“There are other products — household goods, bicycles, etc. — and it may make sense” to weigh lifting tariffs on those, she said, adding the administration had decided to keep some of the tariffs on steel and aluminum to protect U.S. workers and the steel industry.

Biden has said he is considering removing some of the tariffs imposed on hundreds of billions of dollars’ worth of Chinese goods by his predecessor in 2018 and 2019 amid a bitter trade war between the world’s two largest economies.  

China has also been arguing that tariff reductions would cut costs for American consumers.

Raimondo also told CNN she felt the ongoing semiconductor chip shortage could likely continue until 2024.

“There is one solution (to the semiconductor chip shortage),” she added. “Congress needs to act and pass the Chips Bill. I don’t know why they are delaying.”

The legislation aims to ramp up U.S. semiconductor manufacturing to give the United States more of a competitive punch against China.  

Raimondo said she disagreed with the characterization that Biden’s $1.9 trillion American Rescue Plan had contributed to the current high inflation. Congress passed the COVID-19 relief package a year ago before it was signed into law, marking a signature achievement of Biden’s first year in office. 
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U.S. President Joe Biden Friday used the May jobs report to promote his efforts to boost the economy and fight inflation by lowering the cost of goods and the federal deficit.

The latest U.S. Labor Department jobs report for last month showed the U.S. economy added 390,000 jobs in the month with the unemployment rate at 3.6%, a near historic low.

Speaking to reporters at the White House, the president said the numbers from May brings the total number of new jobs added in the U.S. economy to 8.7 million since he took office. He said these numbers reflect the significant economic recovery from pandemic-driven recession two years ago, which he said was “the most robust in modern history.”

Biden said the job numbers and other factors reflect an economic foundation that is historically strong, allowing the U.S. to fight inflation from a position of strength. He introduced two additional elements for fighting inflation: lowering costs of “everyday goods,” and lowering the deficit.

The president said higher costs for the two primary goods on the minds of U.S. consumers —gasoline and food — are directly related to “[Russian President Vladimir] Putin’s war in Ukraine.”

“Ukraine has 20 million tons of grain in storage right now, and it’s been in storage since the last harvest,” said Biden. “Normally, that would have already been exported into the world market. But because of Putin’s invasion and a blockade of the port at which they could take that grain out for the rest of the world, it’s not.”

Biden said he has offered proposals to lower inflation that have stalled in Congress, such as clean energy investment proposal that would lower energy costs, as well as plans to lower prescription drug costs, rent and mortgages, and high-speed internet. He called on Congress to move on these and other proposals.

The president said lowering the federal deficit is another effective way to lower inflation. He said, according to the Congressional budget office says the U.S. is on track to lower the federal deficit by $1.7 trillion this year and credited his economic strategies to driving than decline.

Biden was also asked about a recent announcement by Tesla CEO Elon Musk saying he had a “super bad” feeling about the U.S. economy and wants to cut 10% jobs at his electric vehicle company.

The president responded by noting Ford Motor company was adding six thousand new jobs, as are other U.S. car makers, and the computer chip maker Intel was adding 20,000 new jobs. He added, to Musk, “Lots a’ luck on his trip to the moon.”

The president also would not comment on reports that he plans to travel to Saudi Arabia later this month, though he did say he say there is a possibility he would be making a Mideast and meeting with regional leaders that could include representatives from Saudi Arabia.

Some information for this report was provided by the Associated Press.
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President Joe Biden publicly acknowledged on Friday that he may travel to Saudi Arabia soon, a trip that multiple sources say is expected and could include talks with Saudi Crown Prince Mohammed bin Salman.

Biden told reporters that he does not yet have direct plans to make a trip to Saudi Arabia but if he does it would be to try to advance Middle East peace prospects.

Sources familiar with the process say Biden is planning a trip to Saudi Arabia in conjunction with a trip to Europe and Israel in late June.

As recently as Wednesday, the White House said Biden still felt bin Salman was a “pariah” for what U.S. intelligence says was his role in the killing and dismembering of a political opponent, Washington Post journalist Jamal Khashoggi, in Turkey in 2018.

Khashoggi’s murder at the Saudi consulate in Istanbul tainted the crown prince’s image as a reformist. The Saudi government has denied any involvement by him.

“Look, I’m not going to change my view on human rights but as president of the United States my job is to bring peace if I can and that’s what I’m going to try to do,” Biden said in explaining his reasoning for why he may make the trip.

The visit would be aimed at bolstering relations with Saudi Arabia at a time when Biden is trying to find ways to lower gasoline prices in the United States.

Biden would participate in a Riyadh summit of the Gulf Cooperation Council, a regional union whose members are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, sources said.  

“There is a possibility that I would be going to meet with both the Israelis and some Arab countries at the time, including I expect … Saudi Arabia. … But I have no direct plans at the moment,” he said.

Prospects for a Biden visit improved on Thursday when OPEC+ agreed to increase oil output by 200,000 barrels in July and August and a ceasefire in the Yemen war was extended.

The White House took the rare step of recognizing the role played by bin Salman in extending the Yemen ceasefire.
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Tesla CEO Elon Musk has a “super bad feeling” about the economy and needs to cut about 10% of jobs at the electric carmaker, he said in an email to executives seen by Reuters.

The message, sent on Thursday and titled “pause all hiring worldwide,” came two days after the billionaire told staff to return to the workplace or leave, and adds to a growing chorus of warnings from business leaders about the risks of recession.

Tesla employed almost 100,000 people at the company and its subsidiaries at the end of 2021, according to its annual SEC filing.

The company was not immediately available for comment.

Tesla shares fell nearly 3% in U.S. pre-market trade on Friday and its Frankfurt-listed stock was down 3.6% after the Reuters report. U.S. Nasdaq futures NQcv1 turned negative and were trading 0.6% lower.

Musk has warned in recent weeks about the risk of a recession, but his email ordering a hiring freeze and staff cuts was the most direct and high-profile message of its kind from the head of an automaker.

So far, demand for Tesla cars and other electric vehicles has remained strong and many of the traditional indicators of a downturn – including increasing dealer inventories and incentives in the United States – have not materialized.

But Tesla has struggled to restart production at its Shanghai factory after COVID-19 lockdowns forced costly outages at the plant.

“Musk’s bad feeling is shared by many people,” said Carsten Brzeski, global head of macroeconomic research at Dutch bank ING. “But we are not talking about global recession. We expect a cooling of the global economy towards the end of the year. The U.S. will cool off, while China and Europe are not going to rebound.”

Musk’s gloomy outlook echoes recent comments from executives including JPMorgan Chase & Co JPM.N CEO Jamie Dimon and Goldman Sachs President John Waldron.

A “hurricane is right out there down the road coming our way,” Dimon said this week.

Inflation in the United States is hovering at 40-year highs and has caused a jump in the cost of living for Americans, while the Federal Reserve faces the difficult task of dampening demand enough to curb inflation while not causing a recession.

Musk, the world’s richest man according to Forbes, did not elaborate on the reasons for his “super bad feeling” about the economic outlook in the brief email seen by Reuters.

A number of analysts have cut price targets for Tesla recently, forecasting slower deliveries due to Chinese lockdowns and lost output at its Shanghai plant, a hub supplying electric vehicles to China and for export.

China accounted for just over a third of Tesla’s global deliveries in 2021, according to company disclosures and data released on sales there.

Wedbush Securities analyst Daniel Ives said in a tweet it appeared Musk and Tesla were “trying to be ahead of a slower delivery ramp this year and preserve margins ahead of an economic slowdown.”

‘Pause all hiring’

Before Musk’s warning, Tesla had about 5,000 job postings on LinkedIn from sales in Tokyo and engineers at its new Berlin gigafactory to deep learning scientists in Palo Alto. It had scheduled an online hiring event for Shanghai on June 9 on its WeChat channel.

Musk’s demand that staff return to the office has already faced pushback in Germany.

“Everyone at Tesla is required to spend a minimum of 40 hours in the office per week,” Musk wrote in his Tuesday email. “If you don’t show up, we will assume you have resigned.”

Musk has referred to the risk of a recession repeatedly in recent comments.

Remotely addressing a conference in mid-May in Miami Beach, Musk said: “I think we are probably in a recession and that recession will get worse.” He added: “It’ll probably be some tough going for, I don’t know, a year, maybe 12 to 18 months, is usually the amount of time that it takes for a correction to happen.”

In late May, when asked by a Twitter user whether the economy was approaching a recession, Musk said: “Yes, but this is actually a good thing. It has been raining money on fools for too long. Some bankruptcies need to happen.”

Musk also engaged on Thursday in a Twitter spat with Australia tech billionaire and Atlassian Plc TEAM.O co-founder Scott Farquhar, who ridiculed the back-to-office directive as “like something out of the 1950s.”

Musk tweeted: “recessions serve a vital economic cleansing function,” in response to a tweet by Farquhar who encouraged Tesla employees to look into its remote work positions.

Jason Stomel, founder of tech talent agency Cadre said of the return-to-work directive: “I think there’s potential that this is just a disguised layoff, meaning they’re able to get rid of people with attrition, or without having to actually have a layoff.”

“(Musk) knows there’s a percentage of workers who are just not going to come back,” which he said would be cheaper because no severance would be needed.
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As China’s COVID-containment lockdowns stall goods en route to price-conscious U.S. consumers, New Jersey manufacturer Mitch Cahn is finding traces of gold in the snapped links of the global supply chain.

Eleven miles from Manhattan, business is surging at Cahn’s textile company, which boasts a 100% local supply chain.

“We manufacture everything from scratch right here in north Newark. We have been in business for 30 years, we now have about 155 workers, and we are hoping to hire another 25 immediately,” said Cahn, founder and president of Unionwear.

Established in 1992, Unionwear manufactures customized baseball hats, scarves and backpacks in the North Ward of New Jersey’s most populous city.

“Business is very solid this year. We’ve seen a surge in business from companies that are no longer able to import goods, and now they are buying products domestically,” Cahn told VOA Mandarin.

For his customers, the “Made in USA” price is right after decades in which American stores were filled with less costly Chinese-made products.

His buyers are not alone in their support for U.S.-made goods. In a 2020 survey by the Reshoring Institute, which advocates the return of manufacturing to the U.S., about 70% of the American respondents said they preferred U.S.-made products. Among them, 83% said they would pay up to 20% more for products made domestically.

COVID snaps supply chain

China has imposed strict COVID-containment lockdowns that are disrupting the supply chain. Export goods are going nowhere as shipping companies increase freight charges and pandemic-related labor shortages worsen delays.

According to the BR Logistics website, container rates for China-U.S. routes are now between $15,000 and $18,000 dollars per 40-foot container, or two to three times higher than pre-pandemic prices.

In addition, the Ukraine crisis has disrupted the global energy supply, pushing oil prices, and therefore shipping costs, higher. Cahn’s baseball caps and other products gain an edge because his products travel shorter distances to reach U.S. buyers, a cost saving that helps counter China’s lower labor costs.

Cahn said that before the pandemic, his baseball caps cost about 30% to 40% more than imports from China.

Currently a baseball cap bought for $2.50 in China will end up being $8 to $9 dollars a unit when it gets to the U.S., he said, once tariffs, shipping costs, packaging and the cost of meeting testing requirements for goods manufactured overseas are added in. The 10% to 15% U.S. tariff imposed on textile products accounts for some of that price differential, according to just-style.com, an industry website.

On average, Unionwear’s baseball caps cost around $8 to $10 per unit wholesale.

“Now we are competitive,” Cahn said.

Now focused on supply chain resiliency because of the pandemic, companies bigger than his are seeing the benefits of using suppliers closer to their customers. “Many U.S. companies are realizing that keeping processes closer to home can be much more reliable and secure,” according to an April Thomasnet.com article.

General Motors announced on January 25 that it would invest $7 billion in its plant in the U.S. state of Michigan to advance production of electric and autonomous vehicles through 2025, according to a news release from the Michigan Economic Development Corporation.

Although the announcement made no mention of China, it said the investment would solidify and strengthen the supply chain throughout Michigan, long known for its concentration of automotive-related manufacturers and suppliers. As Governor Gretchen Whitmer boasted, it’s “the place that put the world on wheels.”

Some non-U.S. companies have also pledged to invest in the U.S. to serve their customers in the North American market. South Korea’s Samsung announced in November that it would invest $17 billion in a new facility in Texas to produce advanced semiconductors and ensure the “stability of the global semiconductor supply chain.” The plant is expected to become operational in late 2024.

Samsung, which has operated a memory chip plant in China since 2014, is part of a larger trend. According to the most recent Kearney Reshoring Index released in 2022, “79 percent of executives who have manufacturing operations in China have either already moved part of their operations to the United States or plan to do so in the next three years, and another 15 percent are evaluating similar moves.”

‘Triple bottom-line mindset’

William Reinsch, an expert in international trade at the Center for Strategic and International Studies, a Washington think tank, said that many U.S. companies have been considering localizing their supply chains for quite some time.

“This is not a new thing. This is at least [a] 10-year trend. [The companies] want to have shorter supply chains. They want to be near their customers. They are concerned about volatile energy prices and rising shipping costs, both ocean freight and air freight,” he told VOA Mandarin.

The tariffs imposed during the Trump administration on most Chinese imports have created price spikes that have made it more expensive to import those goods, Reinsch said, and COVID-19 has revealed supply chain flaws to companies.

Harry Moser is the founder and president of the Reshoring Initiative, a nonprofit group focused on bringing manufacturing back to the U.S. Moser told VOA Mandarin that “20% to 30% of the companies can be brought back without raising prices to their customers, without reducing their profit margin, by recognizing all the costs that they previously ignored.”

Some examples of products ripe for reshoring, Moser said, include those that incur high freight charges or involve frequent design changes, or those with volatile demand, such as seasonal clothing.

“The idea here would be to shorten supply chains,” said Nick Vyas, an associate professor of operations and a supply chain expert at the University of Southern California Marshall School of Business.

The customer-centric supply chain would benefit companies in multiple ways, Vyas told VOA Mandarin. “It will be much more resilient, and it certainly would be a lot more sustainable. We will have a lot less carbon footprint than what we have produced over the last 30 years.”

Vyas said that for the past three decades, business leaders ran companies with a bottom-line mindset that considered only the cost of manufacturing.

“We need to get into the triple bottom-line mindset: Cost is one variable, but we also need to think about resiliency and sustainability,” he said.

Unionwear’s Cahn is optimistic about reshoring. He thinks the era of cheap imports is over and has some advice for companies looking to strengthen their supply chains: “I think it makes sense to develop a relationship with domestic source of supply … and also develop relationships with suppliers” in places such as the Caribbean Basin, South America and Canada. With tighter links, manufacturers can “insulate [themselves] from the ever-increasing costs of getting goods across the oceans.”
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The Chinese Foreign Ministry reacted angrily on Thursday to the announcement that, later this month, the Biden administration will begin enforcing a new law barring products made with forced labor in China’s Xinjiang province from being imported to the United States.

The Uyghur Forced Labor Prevention Act (UFLPA), which President Joe Biden signed into law in December, is set to take effect June 21. Under the law, U.S. Customs and Border Protection will treat any goods that are made in Xinjiang, either wholly or in part, as the product of forced labor unless the importer can show “clear and convincing evidence” that they are not.

The law passed with strong bipartisan support, as lawmakers from both parties joined to condemn China’s treatment of its Uyghur Muslim minority. The U.S., Canada, the United Kingdom, the Netherlands and an array of human rights groups have accused China of perpetrating genocide against Uyghurs, with a regime that includes mass imprisonment and forced labor, vast “reeducation” camps, forced sterilization, blanket surveillance and the separation of children from families.

China reacts

China has denied the allegations against it in forceful terms, and Foreign Ministry spokesperson Zhao Lijian repeated those denials Thursday when he condemned the U.S. announcement that the UFLPA would soon come into force.

“We have rebuked U.S. lies on Xinjiang many times,” he said at a news conference. “The so-called Uyghur Forced Labor Prevention Act, in disregard of facts, maliciously smears the human rights conditions in China’s Xinjiang, grossly interferes in China’s internal affairs, gravely violates international law and basic norms governing international relations, and violates market rules and commercial ethics.”

Zhao warned of dire consequences that, he said, would follow from the law’s being allowed to take effect.

“If implemented, the act will seriously disrupt normal cooperation between Chinese and American businesses, undermine the stability of global supply chains and eventually hurt the U.S.’s own interests,” he said. “We urge the U.S. to refrain from enforcing the act, stop using Xinjiang-related issues to interfere in China’s internal affairs and contain China’s development. If the U.S. is bent on doing so, China will take forceful measures to firmly defend its own interests and dignity.”

China’s potential response

The Biden administration has given no indication that it would consider seeing the law go unenforced. On Wednesday, in a webinar about the new law, a Customs and Border Protection official said, “The expectation is that we will be ready to implement the Uyghur Act on June 21, and that we have the resources.”

How China will respond is not immediately obvious, but some sort of reaction is almost certain, said Marcus Noland, executive vice president and director of studies at the Peterson Institute for International Economics.

“The Chinese play hardball,” Noland told VOA. “They use what you might call legal means, they abuse legal means, and they use extralegal means in terms of economic coercion or retaliation, oftentimes linked to noneconomic issues.”

In the past, he said, Beijing has used “anti-dumping” sanctions to retaliate for what it has seen as political slights. For example, it imposed sanctions on Australian barley, beef and wine in what was widely seen as retaliation over an Australian call to probe the origins of COVID-19 on mainland China. Beijing restricted imports of Norwegian salmon after the Nobel Committee gave the Nobel Peace Prize to Chinese dissident Liu Xiao Bao.

Noland said the U.S. might see those types of retaliatory sanctions. However, he said, Beijing might resort to something more complex, such as demanding that Chinese firms break the embargoes the U.S. and its allies have imposed on Russia for the invasion of Ukraine.

US businesses concerned

U.S. companies that do business in China are concerned about the looming implementation of the UFLPA, said Doug Barry, a vice president with the U.S.-China Business Council, in an email exchange with VOA.

The law creates what is known as a “rebuttable presumption” that goods with ties to Xinjiang were produced with forced labor. This means that unless an importer can prove to the satisfaction of Customs and Border Protection that the goods are not made with forced labor, they will be subject to seizure, forfeiture, fines and other penalties.

This creates “a high bar” for importers to clear, Barry said, and the rules importers must observe remain in question.

“The specifics of what must be proven and how have not been announced, leaving American companies to worry that cargo may be seized for unspecified reasons,” he said. “Companies insist that they take every reasonable action to ensure supply chains don’t involve forced labor. The worry is that the law is so broad that it can apply to many categories of goods regardless of proximity to Xinjiang.”

The uncertainty is made worse by what Barry described as the “amped-up rhetoric” coming from both Washington and Beijing.

“In the absence of official dialogue, [it] makes it difficult to put a floor under the downward trajectory of the bilateral relationship.”

Labor investigation demanded

Also on Thursday, the United States, Canada, the U.K., Australia and the European Union asked the International Labor Organization, an arm of the United Nations, to launch a probe into whether China is abiding by its commitments to international labor conventions that Beijing has ratified.

The countries cited reports of mistreatment of Uyghurs in Xinjiang in general, and of prisoners being subject to forced labor in particular.

“We call on the PRC to immediately end its discriminatory policies and abuses against minority groups,” U.S. Ambassador to the U.N. in Geneva Sheba Crocker said in a statement.

Crocker called on China to “provide full and unhindered access, including meaningful, unrestricted and unsupervised access to all relevant organizations, individuals and locations implicated in the system of detention.”

A Chinese representative to the U.N. in Geneva denied the allegations, calling them “a political show.”
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India has allowed wheat shipments of 469,202 tons since banning most exports last month, but at least 1.7 million tons is lying at ports and could be damaged by looming monsoon rains, government and industry officials told Reuters. 

Shipments that have been allowed moved mainly to Bangladesh, the Philippines, Tanzania and Malaysia, said a senior government official, who also stated the total quantity. 

The ban pulled Indian wheat exports down to 1.13 million tons in May from a record 1.46 million tons in April, the official said, declining to be named. 

India, the world’s second-biggest wheat producer, imposed a general ban on exports on May 14 as a scorching heat wave curtailed output and pushed domestic prices to record highs. 

Exceptions were allowed for shipments backed by letters of credit that had already been issued and those to countries that requested supplies to meet their food security needs. 

But even after the departure of some wheat, at least 1.7 million tons remained piled up at various ports, three dealers with global trading firms told Reuters. 

Before the ban, exporters moved unusually large quantities to ports, because the crop was then expected to be strong and the government was encouraging them to replace Black Sea supply lost because of the war in Ukraine. 

They expected New Delhi to authorize shipments this year of 8 million to 10 million tons or even more, compared with 7.2 million tons last year. 

“Kandla and Mundra ports have maximum wheat stocks,” said a Mumbai-based dealer with a global trading firm. “Together they are holding more than 1.3 million tons.” 

The government needed to issue export permits promptly, because wheat at the ports was in loose form and therefore vulnerable to monsoon rains, said a New Delhi based dealer with a global trading firm. 

India receives heavy rainfall during the monsoon season, from June to September. 

“The government banned wheat exports to ensure food security, but if stocks get damaged by rains, then it will not serve any purpose,” the dealer said. 

Moving the wheat back out of ports and into interior towns for local consumption was unfeasible, as traders would incur additional losses on loading and transportation fees, said the Mumbai-based dealer. 

“The government should allow exports of wheat lying at ports for government-to-government deals,” he said. 

India has received requests to supply more than 1.5 million tons of wheat from several countries facing shortages. Read full story 

Reporting by Rajendra Jadhav, Aftab Ahmed; Additional reporting by Mayank Bhardwaj; editing by Gavin Maguire and Bradley Perrett 
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U.S. President Joe Biden met with major manufacturers of infant formula on Wednesday, and suggested their ranks should grow, as his administration presses ahead with efforts to boost imported supplies to help ease a nationwide shortage. 

“We need more new entrants in the infant formula market,” Biden said during a virtual meeting with executives from ByHeart, Bubs Australia, Reckitt Benckiser Group, Perrigo Company and Nestles Gerber. 

Multiple global suppliers are seeking U.S. approval to ship critical baby formula as Biden’s administration accelerates what it has dubbed “Operation Fly Formula” to help fill store shelves and calm frustrated parents. 

With about $4 billion in annual sales, the U.S. baby formula market has historically been dominated by domestic producers, with imports limited and subject to high tariffs. 

But U.S. parents have struggled to find baby formula in recent months after a February recall of some formulas by one of the nation’s main manufacturers, Abbott Laboratories, coupled with pandemic-related supply chain issues. 

The latest administration effort to solve the problem includes an announcement on Wednesday that United Airlines has agreed to transport U.K.-made Kendamil formula free of charge from Heathrow Airport in London to multiple airports across the United States over a three-week period. 

This first shipment, which includes Kendamil Classic and Kendamil Organic formula, will be available at Target stores across the country in the coming weeks. 

The administration also secured two flights totaling 380,000 pounds of baby formula from Bubs Australia that will be delivered to California and Pennsylvania on June 9 and June 11, respectively. 

Biden said on Wednesday he first learned of the severity of the U.S. baby formula shortage in early April. The White House said it had been working around the clock since February to address the problem. 

U.S. lawmakers have criticized the Food and Drug Administration (FDA) for not acting promptly to address the problems that caused the recall at Abbott’s Michigan plant, which is set to reopen June 4. 

The Biden administration has relaxed its import policy and invoked the Defense Production Act to help increase available U.S. supplies, which is still expected to take weeks. It has also said it could use federal resources to help transport supplies to retailers. 

Two million cans of formula have been sent from the U.K., and Australian manufacturers are also preparing to send in more product. 

Thorben Nilewski of Organic Family, which makes the popular Holle infant formulas, said in an email that the German company applied for the FDA’s temporary approval but has not yet received any feedback. 

Many U.S. parents rely on baby formula. Fewer than half the babies born in the United States were exclusively breast-fed through their first three months, according to the Centers for Disease Control and Prevention’s 2020 Breastfeeding Report Card. 
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The U.S. launched a new trade pact with Taiwan on Wednesday, hoping to forge closer economic ties with the island territory that China claims as its own, while blunting Beijing’s economic clout in the region.

Biden administration officials said the U.S.-Taiwan deal would boost bilateral digital and clean energy trade and that the two partners would open talks to further technology trade and investments. 

In announcing the pact, Commerce Secretary Gina Raimondo said economic relations between the U.S. and Taiwan were especially important because Taiwan is a leading supplier of advanced semiconductors needed in an array of consumer technology products. Senior administration officials said controls on the export of sensitive technologies would be addressed in talks between the U.S. and Taiwan. 

“Taiwan is an incredibly important partner to us, especially as it relates to semiconductors,” Raimondo told reporters. “We look forward to continuing to deepen our economic ties with Taiwan, and we are in active conversations with Taiwan.” 

The U.S.-Taiwan pact comes days after President Joe Biden announced a new economic cooperation agreement with a dozen Asia-Pacific countries during his trip to South Korea and Japan.

Taiwan was not invited to join the Indo-Pacific Economic Framework out of concerns from some countries that the country’s participation might anger China.

But a senior administration official said, “The Biden-Harris administration sees Taiwan as a leading democracy, a technological powerhouse and a key economic and security partner.” 

The latest U.S.-Taiwan connection could further strain Washington-Beijing relations. In Asia last week, Biden said the U.S. would defend Taiwan militarily if China were to attack the democratic, self-governed island, a statement seemingly at odds with the U.S.’s long-standing “one China” policy recognizing Taiwan as part of mainland China. 

While the White House later said there was no change in U.S. policy, the U.S. does ship weaponry to Taiwan. 

Biden’s comment drew a rebuke from China, with Chinese Foreign Ministry spokesman Wang Wenbin saying that “no forces, the U.S. included, can hold back the Chinese people’s endeavor to reunify the nation.”
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In the spring of 2020, as COVID-19 spread throughout the world in ways not fully understood, the United States faced a critical shortage of protective masks. 

Dozens of manufacturing startups attempted to meet the demand for what was then a confusing array of grades and types — N95, KN95, full-face respirators.  

Now, after a short respite from many COVID-19 precautions, the U.S. is weeks into a new surge in cases that may foreshadow a greater one this fall, and those same small companies that make masks are hurting.  

John Bielamowicz is a co-founder of United States Mask. The Fort Worth, Texas, company is among those struggling.  

Bielamowicz launched his mask-making mission after reading social media posts about medical professionals not having N95 masks in the pandemic’s terrifying early months. It was caregivers like them who had helped his family in 2016, when his son Matthew was born missing 80% of his diaphragm on the left side. 

Bielamowicz and his business partner ​David Baillargeon put their commercial real estate business on hold to start the mask company. 

“This was our way of paying it back … for the gift that they gave us for sending us home with our son,” Bielamowicz told VOA Mandarin in a virtual interview. “It was a debt that I never thought that I’d be able to pay back.” 

The partners began reading and experimenting in February 2020, and by late October of that year, their N95 masks carried a National Institute for Occupational Safety and Health certification. At its peak in early 2021, the company produced millions of N95 masks a month and employed close to 50 people. 

“For me and my family, this was a mission, and we were going to do it or fail trying,” Bielamowicz said. “And we didn’t fail. We did it.”  

Masks and jobs

The American Mask Manufacturers Association (AMMA) represents small companies that started making masks during the pandemic.  

“During the pandemic, we created just over 8,000 new manufacturing jobs. And this was at a time where most businesses were laying people off or furloughing people,” Lloyd Armbrust, president of the association, told VOA in a virtual interview.  

But attitudes toward mask wearing have varied widely across the U.S. since 2020, and on April 18, a federal judge in Florida voided the national mask mandate covering airplanes and other public transportation. This came a day before the Biden administration said it would no longer enforce a U.S. mask mandate.  

Armbrust American, Armbrust’s mask company in Pflugerville, Texas, staggered from the twin blows.  

“That day, we saw our online sales be cut at half or even more,” said Armbrust, who added that he and other mask-makers had already been competing with cheap masks from China before the one-two punch.  

China and masks 

According to research published last year by the Peterson Institute for International Economics, a Washington-based think tank, 72% of the masks and respirators imported by the U.S. in 2019 came from China. 

When the coronavirus that causes COVID-19 was first identified in humans in Wuhan, China, in late 2019, U.S. imports of protective masks from China plunged. 

When China resumed exporting government-subsidized masks in 2020, it attempted to create “a monopoly within the PPE (personal protective equipment) market,” the AMMA charged, and manufacturers such as Armbrust American found themselves in difficulty. 

“Our raw material costs me about $0.015 per mask,” Armbrust said. “And yet China can deliver it to the United States for less than $0.01. They say that they’re more efficient, but how is that possible when the cost of their finished products is cheaper than I buy the raw materials for? It’s just not possible. The answer is, the Chinese government is subsidizing it because they don’t want to lose this business.”  

In response to VOA Mandarin questions about China’s mask exports to the U.S., Liu Pengyu, the spokesman for the Chinese embassy in Washington, said, “I would like to point out that as a market economy, China has earnestly fulfilled its WTO (World Trade Organization) commitments and abides by multilateral economic and trade rules. Chinese merchandise is cheap and good because of the good supply chain, sufficient competition and economies of scale, not non-market behavior.” 

“I can be very competitive, but I can’t be competitive against the whole government. … In 2021, we laid off about 70% of our staff,” Armbrust said. 

Bielamowicz’s United States Mask laid off people as well. 

“It was the worst day of my career,” he said.   

An uncertain future 

Nationwide, the AMMA, which peaked with almost 30 members in 2021, now includes fewer than 10 enterprises still producing masks. 

Facing masks’ uncertain future, Armbrust American shifted to producing home air filters. 

Bielamowicz has been traveling to Washington to lobby the federal government. 

“We’re asking for free competition,” Bielamowicz said. “We know the free market works.” 

That said, Armbrust hopes the government can subsidize small companies that make masks, as it does farmers, to preserve production capability so that when the next pandemic hits, small producers can jump back into mask making. 

“If I could just have a base,” Armbrust said, “… where I could mothball these machines and … I could afford to pay the rent for the space instead of actually shutting it down and scrapping the machines, that would be another solution.”  
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