Big take away, President Trump was right on many of his industrial policies.
Kind of amused at the discussion of force majeure clauses given that one of the potential pitfalls of this emerging Black Swan event is that supply chains in China often extend to other less developed asian countries where the whole concepts of contracts and basic property fights are kind of murky, business ethics are lacking and enforcement mechanisms for contracts are rudimentary at best.
Lots of distressed product can potentially disappear overnight due to lack of security and supply chains can breakdown as the handoffs become difficult, if not impossible due to closure of borders or breakdowns in transportation
American manufacturers can have disruption due to shortages of critical production products , parts and raw materials - many, if not most, have no domestic supply source because they have either left for China or have been driven out of business by Chinese competition. Lots of decision makers are beginning to sweat over the potential and the rational end result should be a move to develop domestic suppliers for critical materials and products.
Equally ominous is that China’s pool of competent managers and technical people is relatively thin and they do not have deep benches to draw from. God forbid, but if this gets bad we could see a replay of the loss of hard to replace talent and key players we saw in Africa due to AIDS crisis
However this plays out, it will greatly further Trump’s bid to decouple the Chinese from the American economy.
For the short term, supply chain disruptions can cause US and international stocks to drop. For the long term, domestic manufacturing will increase and the jobs market will get even tighter. Will that push US stocks higher?