Trump’s America Inc. Reboot Needs to Sync With Canada, Mexico
President Donald Trump made it official on Thursday: He’s determined to reopen the U.S. economy — at least in part — next month.
“A national shutdown is not a sustainable long-term solution,” he said in a press conference announcing his administration’s three-phase plan to restart economic activity in America. “To keep vital supply chains running, these chains have to be taken care of so delicately. We must have a working economy and we want to get it back very, very quickly.”
Yet, for companies whose supply lines stretch across North America, that won’t be enough to get back to business. Take the automotive sector. Without a coordinated timetable between all auto-producing states in the U.S., Mexico and Canada, they won’t be able to manufacture vehicles.
So far, the Trump administration seems to be thinking only about steps within the U.S. borders and by individual states. Automakers learned their lessons from cycling through the coronavirus outbreak and the beginning of its recovery in China, where many factories have progressively picked up production again. They know the process in North America will be slow and that it will come with a number of added hurdles.
There will be layers of precaution to ensure the restart is safe and doesn’t jeopardize employees’ health. Industry playbooks propose personal protective equipment for all workers, staggered shifts and adherence to social-distancing rules, which means plants have to be restructured.
“We’re identifying all the PPE requirements,” Jim Farley, Ford’s chief operating officer, said last week. “We’re not going to bring anyone back or even think about it before we have the sufficient supplies.”
But a safe restart also requires coordination among the North American partners on protocols to ensure this won’t result in a renewed shutdown and yet another restart. Very few links in the supply chain could afford such a scenario.
USMCA Update: Remember the revised Nafta deal Trump signed in late January, just before coronavirus overtook over the world’s attention? Considering the ongoing health crisis, the earliest that the U.S.-Mexico-Canada Agreement should take effect is Jan. 1 next year, the advisory panel for U.S. Customs and Border Protection said this week.
Charting the Trade Turmoil
Singapore’s exports unexpectedly surged in March from a low base in the previous year, despite disruptions to global supply chains as the coronavirus spread across the world. Non-oil domestic exports grew 17.6% in March from a year ago, the highest since October 2017, according to data published by Enterprise Singapore on Friday.
Today’s Must Reads
- China’s downturn | The world’s second-largest economy suffered its first contraction in decades, leaving China with slumping demand at home and abroad as other major nations battle the virus.
- Wilting blooms | As people cancel events and big orders, the ripples stretch from Dutch auction halls and Kenyan rose fields, battering the $8.5 billion global flower trade.
- Stand and deliver | Amazon responded to France’s order that it stop deliveries of non-essential items by suspending all deliveries for five days, creating a worker-rights conundrum.
- Grain drain | Vietnam, the world’s top rice exporter, is struggling to replenish government reserves after consumers around the world rushed to secure supplies of the food staple.
- No leftovers | Some of America’s largest food companies are finally feeling the pinch with restaurants across the U.S. remaining closed for weeks as a result of the pandemic.
- Trouble brewing | The pandemic has changed life in unprecedented ways, disrupting routines like daily exercise and trips to the grocery story. Next it may be coming for your morning coffee.
- Blown away | Wind-turbine makers are finding it increasingly difficult to get the parts they need to build their machines, snarling progress on a global shift toward renewables.
- Not buying it | China isn't meeting its purchase targets set out in the first phase of its trade deal with the U.S.
- Slow start | Traffic data from Beijing show not just the drop in activity when the lockdown was in place, but also the pace of resumption as controls have been eased.
- Use the AHOY function to track global commodities trade flows.
- See BNEF for BloombergNEF’s analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.
- Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts.
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