Commerce Secretary Gina Raimondo is set to become the latest government official to travel to China amid rising tensions between the two countries. The worsening relations are leaving American companies facing an uncertain environment.
Even before tensions increased between the two countries, U.S. companies' perceptions of China had already taken a hit. The emergence of China from the pandemic came as tensions with the U.S. over issues ranging from Taiwan to intellectual property to labor practices have worsened.The U.S. banned the export of certain microchips to China. Then China imposed restrictions on two rare elements used in high-tech manufacturing.
"There's just the uncertainty around what kind of activity might attract the wrong kind of scrutiny, and get you into trouble."Even before President Biden signed that executive order, U.S. investors steered away from certain parts of China's economy, especially in technology and sectors such as AI and chips that have potential national security implications.
Still, many companies plan, or at least hope, to stay put — given how much they have invested in manufacturing facilities already, and the time it takes to adjust supply chains.
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