U.S. manufacturers are adjusting supply chains due to coronavirus
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The Chinese government is urging people in areas less affected by the coronavirus outbreak to go back to work this week, telling farmers not to miss the spring planting season and asking large companies aim towards production targets.
But many businesses in China remain closed as employees self-quarantine at home and grapple with interrupted domestic supply chains and shipping networks, deepening the toll on the global economy. With so many factories idled, some companies outside of China have been scrambling to find alternate sources for materials.
One such company is Riverdale Mills, a Massachusetts-based manufacturer of welded wire mesh used to make everything from lobster traps to garden fencing. CEO Jim Knott told Marketplace’s Sabri Ben-Achour that the virus has forced them to look to Latin America and Europe for chemicals and pigments that are necessary to their production, which ends up being more expensive.
At the same time, the company is struggling with other trade disruptions.
“The rising value of the U.S. dollar presents challenges to manufacturers such as Riverdale Mills,” said Knott, whose company exports about 45% of their product. “It makes our product less desirable on the export market.”
Add tariffs into the mix, and the cost of importing products goes up, too.
“We’re really relying on the domestic economy to supply us with all the raw materials we need. In many cases, that can’t be done,” said Knott.
Click the audio player above to hear the full conversation.
COVID-19 Economy FAQs
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
Are people still waiting for unemployment payments?
Yes. There is no way to know exactly how many people have been waiting for months and are still not getting unemployment, because states do not have a good system in place for tracking that kind of data, according to Andrew Stettner of The Century Foundation. But by his own calculations, only about 60% of people who have applied for benefits are currently receiving them. That means there are millions still waiting. Read more here on what they are doing about it.
What’s going to happen to retailers, especially with the holiday shopping season approaching?
A report out Tuesday from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.
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