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The COVID-19 pandemic has caused supply chain disruptions and elevated concerns the U.S. has become too reliant on production in Asia, and specifically China, for goods and key technologies.
China is the world's largest producer of personal protective equipment, including masks, test kits and more that is needed to control the spread of COVID-19, which was first identified in Wuhan, China, and has infected more than 5.5 million people worldwide.
"We welcome any Americans companies in Hong Kong or China mainland, we will do what we can for full expensing and pay the cost of moving if they return their supply chains and their production to the United States," chief White House economic adviser Larry Kudlow told FOX Business’ Stuart Varney on Tuesday.
Tensions between the U.S. and China have flared in recent weeks after the Chinese government's initial handling of the COVID-19 pandemic and were further strained after Beijing last week moved to tighten its grip on Hong Kong by introducing a national security bill that would bypass the city’s legislature, effectively ending the “one country, two systems” principle used to govern the city.
"I think taking over Hong Kong's national security parameters and judgments was a mistake," Kudlow said. "They're supposed to have one country and two systems, and now we're seeing an attempt, I think, to have one country and only one system."
Kudlow said he "didn't want to speculate" on whether China's aggressions in Hong Kong could kill the phase one trade deal.
U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He recently held "constructive" talks and the trade deal remains on, "for now," according to Kudlow.