If you are going to put in a 40A circuit with a receptacle, you need to be sure the wiring will handle the full current capacity of the circuit and not derate it for a welder duty cycle. If you are hard wiring the welder, which I highly out you are, then you could derate the installation. De-rating with a receptacle is asking for trouble if you or anyone else plugs in something else.
A 30A circuit is adequate to operate a 200DX at full power, at least the previous version.
I use mine at full power connected to a ~110ft or so 10awg extension cord made from soow cord , plugged into my 30A 240V dryer outlet.
As for the 12 ga cord on the machine, the insulation is rated for high temperature and is adequate for protection of the cord, especially with current de-rating as Mark noted. It does make it a bit difficult to attach some plug strain relief's though as most of the plugs aren't intended for 12ga use.
John
Everlast 200DX
Everlast PT185
Shoptask 3-in-1 (not currently in my garage, but I own it...)
Any day on a motorcycle like this that ends just needing parts and labor is a good day.
4.82, 158.67mph 1/8th mile 7.350, 200.35mph 1/4 mile