By Paul Page 

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President Donald Trump's formal withdrawal from the 12-nation Pacific trade agreement leaves a trade vacuum in a fast-growing region that China appears anxious to fill. Mr. Trump's action was largely symbolic, the WSJ's William Mauldin reports, since it has been clear since the November election the Trans-Pacific Partnership had no path toward approval. Still, as one expert said, it puts the world on notice that all of America's traditional economic and political alliances are open to renegotiation. With free-trade backers troubled at TPP's demise, including logistics operators that had hoped the pact would fuel dramatic new growth in the movement of goods, China is looking to step into the void. Officials in Beijing say China is ready "to play the role of leader" in regional trade dealings, the WSJ's John Chin reports. That may mean new deals with Vietnam, Japan and other countries that would help China have a bigger role in shifting manufacturing trends in Asia, and keep industrial business aligned with the country's growing role as a shipping power.

Mr. Trump is offering U.S. manufacturers incentives to shift their supply chains back to the country, along with stark warnings of punitive action if they move overseas. The president told top executives from a dozen manufacturers at a White House session he will impose "a very major border tax" on imported goods if the companies move operations abroad, the WSJ's Carol E. Lee and Damian Paletta report. Mr. Trump has talked about such a tax for several weeks, aiming his warnings mostly at auto manufacturers, but hasn't offered details on how such a program would work. Retailers and other businesses that depend on imports are raising alarms about higher costs they would face if production moves to the U.S., but Mr. Trump is also suggesting a broader rewrite of industrial policy could include carrots as well as sticks. He asked the business leaders, including the CEOs of Ford Motor Co., Under Armour Inc., Whirlpool Corp. and Dow Chemical Co., to report back with specific ideas to boost U.S. manufacturing -- ideas that surely will make it worth it for them to redraw their global supply chains.

The world's biggest outsourced electronics manufacturer is already looking for some extra motivation to bring factory work to the U.S. Foxconn Technology Group says it is considering investing $7 billion to build a flat-panel screen factory in the U.S., and the WSJ's Eva Dou reports discussions are already underway with officials in Pennsylvania and other states. Terry Gou, founder of the Taiwan-based company formally known as Hon Hai Precision Industry Co., outlined the plan that he says could create 30,000 to 50,000 jobs making flat-panel screens for Sharp. Corp., the Japanese electronics manufacturer Foxconn acquired last year. Foxconn's potential investment carries big significance because of the new Trump administration's pledge to revive U.S. manufacturing. More practically, Foxconn's scale could draw other components suppliers into its orbit, bolstering the company's new distribution channels.

E-COMMERCE

Online retailer Warby Parker says it has a clear vision of distribution to consumers, and it includes brick-and-mortar stores. The eyeglasses seller is opening 25 retail locations this year, expanding its stakes in the physical world even as it builds its e-commerce presence, the WSJ's Khadeeja Safdar reports. The seven-year-old company, which opened its first store in 2013, will have 70 stores by the end of this year. The strategy highlights a fracturing of traditional retail markets that Warby Parker co-founder Neil Blumenthal says is more complicated than simply having e-commerce specialists stealing sales from traditional stores. The company is among many brands moving away from bigger department stores and other middlemen, he says, and looking to reach consumers directly and offer more tailored goods and sales strategies. One advantage for Warby Parker is that it leverages data on its online customers to determine store locations, which also helps keep inventory more closely attuned to sales.

QUOTABLE

IN OTHER NEWS

The U.S. dollar is losing its value against major world currencies amid growing concerns over potential U.S. protectionism. (WSJ)

The lending arm of Ford Motor Co. invested in San Francisco startup AutoFi Inc., a step toward offering online auto sales. (WSJ)

Tesla Motors Inc. has extended the battery range for a new version of its Model S sedan to 335 miles on a charge. (WSJ)

Australia says it will give greater scrutiny to overseas deals, signaling resistance to Chinese investment in sensitive assets. (WSJ)

The Singapore Exchange is setting up an index to track the price of liquefied natural gas in the Middle East and India. (WSJ)

Halliburton Co. is seeking price increases from oil-field equipment customers, saying the discounting during the industry downturn is over. (WSJ)

FedEx Corp. named David Bronczek president and chief operating officer and promoted David Cunningham to replace Bronczek as president and chief executive of FedEx Express. (Memphis Commercial Appeal)

Amazon.com Inc. is putting its first distribution center in Colorado, at an industrial park east of Denver. (Denver Post)

Volkswagen AG subsidiary Scania and Toyota are starting a three-year test of truck platooning operations in Singapore. (Automotive Logistics)

The Bangladesh government is cracking down on workers protesting abuses and poor working conditions at garment factories in Dhaka. ( New York Times)

A delegation of Cuban business leaders began a two-week U.S. visit to seek trade deals and foreign investment. (Prensa Latina)

Sierra Nevada Brewing Co. will recall its pale ales and IPAs in 36 states after detecting a packaging flaw that could cause glass to break off into the bottle. (Associated Press)

The Royal Bank of Scotland has sold $600 million in shipping loans as it moves to get out of the maritime sector. (Seatrade Maritime)

Yang Ming Marine Transport expects the Taiwanese government to take a greater stake as part of the container line's recapitalization plan. (The Loadstar)

L Brands Inc., owners of Victoria's Secret, said it would investigate its supply chain for human rights abuses and deforestation impact. (Reuters)

Safe Fleet acquired fellow refrigerated transport equipment maker Randall Manufacturing LLC. (Modern Materials Handling)

ABOUT US

Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin, @jensmithWSJ and @EEPhillips_WSJ and follow the WSJ Logistics Report on Twitter at @WSJLogistics.

Subscribe to this email newsletter by clicking here: http://on.wsj.com/Logisticsnewsletter .

Write to Paul Page at paul.page@wsj.com

 

(END) Dow Jones Newswires

January 24, 2017 06:56 ET (11:56 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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