Companies have simply used trade agreements with Mexico to avoid complying with strict regulations in the US.
It’s also not clear if Mexico and Latin America could have suitable infrastructure, even with massive investment. Geography is destiny and these regions have been cursed with poor geography.
The midwestern US is an industrialists dream come true: plenty of land, plentiful food, navigable waterways, excellent roadways, massive market on the coasts accessible by air and rail on top of ocean, river, and road. The question is, why doesn’t America invest in itself?
America stopped investing in itself because the ROI was much higher in countries with monumentally lower quality of living (and thus, lower worker wages and so on).
On a long enough timescale, this hopefully becomes a self correcting problem: technology and money flows out, improving the standard of living and wages elsewhere, until one day investing in the US makes the most financial sense.
* No one likes welfare. At best, Americans begrudgingly accept it when necessary, but many people (even poor people) refuse to accept it at all.
* Investments into Education are fraught with political issues. Spend $1 billion bucks on a new Math program and everyone loses their collective minds. Buy a new teacher and people think you're indoctrinating them with Critical Race Theory.
* Improve local land, and the leftists yell "Gentrification". Oh, I'm sorry I wanted to improve this area with parks and metro stations and bus stops. Yes, that increases rent prices in the area but what else did you expect to happen?
* Try to build low-income houses elsewhere and people stonewall you with NIMBYism. People don't like their property values declining, which happens when low-cost housing is made.
-----
At some point, its just not worth the political hassle. Americans largely don't want the money or things to change. It doesn't matter if they're right-wing or left-wing, changing cities for the better is change and scary.
This is far from the case. Case in point: nearly 3 trillion and counting in public stimulus over the last couple of years. In fact, even the Republicans are mostly on board with many items from Biden's infrastructure bill, which is in the 2-3 trillion range.
> * No one likes welfare. At best, Americans begrudgingly accept it when necessary, but many people (even poor people) refuse to accept it at all.
This is something that is inherent in American culture, perhaps a bit more so than European countries. Americans as a group believe in 'pulling yourself by the bootstraps', more than any other group. However, support for investment into America is there. The proof is the massive stimulus bills that have passed, despite > 20 trillion of federal debt.
Lets think about how this would play out.
Money will come down from on-high at the Federal level. States will analyze their road systems, and decide "This traffic light should be converted into an overpass, causing 20% reduction in traffic in this area" (or something similar).
And what will happen with the local population? They'll go nuts. Some rightfully so (any such large infrastructure project would cause some houses to be displaced, to make room for the overpass). Others will care about gentrification and rising home prices. Still others will worry about debts and budgets.
That's what I mean. You'll have to force the infrastructure down people's throats if you actually want it to get done.
> The question is, why doesn’t America invest in itself?
What makes you think it hasn't? Manufacturing capacity has increased dramatically. It just happens to be in mostly automated factories which supply few jobs.
How so exactly?
Aside from edge cases, the vast majority of smart people I know move _from_ Canada/Mexico _to_ the US, and not the other way around. And having a lot of smart people is a huge competitive advantage in geopolitic. People without STEM degrees on the other hand don't get to access the US via NAFTA treaty. This treaty is basically a sieve that creates a brain drain in Canada/Mexico, to the benefit of the US, in exchange for some concessions on import tariffs.
And you're right that the US is an industrialists dream come true, and I think a wave of bringing back a lot of industry will happen, now that automation is more mature than it was before. And the US will be in a great position to support this, given all the highly educated people it produces locally and attracts from abroad. Basically, the US will have exported industry when it made sense to do it, and will have imported it back when the balance switched. I'd say that's not a bad deal.
This has nothing to do with the comment you were replying to, specifically
>the massive uncontrolled immigration from Mexico
But the massive influx of immigrants from Mexico (and Central America) over the decades has not been of this kind. It has mostly been low-skilled or unskilled workers who form a growing underclass that can not participate effectively in civic society.
Of course, from the standpoint of sustaining population growth to slightly above replacement levels, immigration of unskilled/low-skilled immigrants is still a good thing. Unfortunately, the US population growth flattened out or went slightly into reverse in 2020. Whether this trend takes hold is anybody's guess, but given America's declining appetite for immigration in general, the worse may still be ahead of us.
As you say, though, automation may make slower population growth moot. Who knows!
I bet Japan and Italy would disagree.
Remember: the reason Kyoto wasn't nuked was because one general had a honeymoon in Kyoto. He put forth the idea that Kyoto (despite being a valid military target), was the cultural center of Japan, and nuking it would prevent the war from ever ending. Japan (probably) would never forgive us, and he proposed Hiroshima ... an important city but less culturally relevant than Kyoto.
That kind of thinking is needed in a hypothetical war. Even if you're 100% warmonger with China, the benefits of open dialog and open trade are huge.
-------
I'm not naive enough to think that trade prevents wars. But there is a "soothing" effect of trade for sure.
According to economic orthodoxy as old as Adam Smith, trading with a large trading partner makes both countries more prosperous.
It also reduces the odds of a shooting war. A shooting war between nuclear powers is likely to escalate to the point where it ends the world.
Also, the most important benefit of the current relationship with China is that warhawks can always grouse about it to distract the American public from domestic problems.
> The top import categories (2-digit HS) in 2019 were: electrical machinery ($125 billion); machinery ($92 billion); furniture and bedding ($27 billion); toys and sports equipment ($25 billion); and plastics ($18 billion).
> U.S. imports of agricultural products from China totaled $3.6 billion in 2019, making China the United States’ 6th largest supplier of agricultural imports. Leading categories included: processed fruit and vegetables ($787 million); snack foods ($172 million); spices ($170 million); fresh vegetables ($136 million); and tea, including herbal tea ($131 million).
--------
#1 item imported from China is electronic machinery. #2 item is non-electronic machinery.
Your "cheap toys" comment is #4 at only $25 billion, a fraction of the amount of electronics we import from China.
So yes, "iPhones / Lenovo" is far more representative of our imports from China than whatever you're thinking.
----------
This is probably important to note: but the USA has no equivalent to the Shenzhen electronics marketplace. Yes, China has leapfrogged us in cheap and effective electronics manufacturing.
No, its not the "high-tech" stuff. But a lot of electronic assembly: from power supplies, to iPhones, to motherboards, happens in Shenzhen for a reason. The nuts-and-bolts of resistors, capacitors, motherboard manufacturing and the like are important.
USA holds the capability to make these things in smaller runs, but not as efficiently as Shenzhen. The closest we had was Silicon Valley, but that turned into software and the hardware/electronics component has basically disappeared. Yes, we have a "maker" movement, but over there, they have Shenzhen: a "maker city".
Its like an entire city that's filled with 1980s / 1990s style "Radio Shack" parts. https://ledpixelart.com/shenzhen/
For a small sample of what's available: https://www.seeedstudio.com/, seeedstudio is one Chinese company that caters to US makers.
How much useful USD capital and more importantly KNOWLEDGE capital was invested into China -- all so we can get lots of average and also crappy power supplies and 80's 90's electrical hardware tech? This could've been done in other places with the right investments.
I'm not saying China didn't do an amazing job. But given the outcome, a powerful autocratic nation that wants to usurp the world authority... was it really worth it for mediocre stuff that's slightly cheaper?
Millions of factory owners have individually decided that waiting 3+ weeks for shipping from Shenzhen was better than any US-based equivalent manufacturer, who probably could ship them the parts in just 5 days at much cheaper shipping prices.
There's no singular person from on high encouraging people to trade with China (at least, any more so than say NAFTA encourages trade with Mexico). This is an individual decision that was ad-hoc decided en-masse over multiple years.
In fact, we had a trade deal with all of Asia (except China) called the Trans-Pacific Partnership. So that we'd encourage trade with Vietnam, India, Mexico, Australia, Canada _INSTEAD_ of China. But we elected a President in 2016 who got rid of the trade deal (and instead pushed for ineffective Tariffs).
-----------
Look, its Apple who decided to manufacture iPads and iPhones in China rather than the USA. In fact, President Obama famously sat down with Steve Jobs to ask him what the USA needed to bring manufacturing back to state-side.
Steve Jobs famously replied: nothing. There's nothing the USA could do to win back the iPad / iPhone. That's how big of a lead China has on manufacturing and assembly. At this point, its a question of what we, the USA can do, to win back the hearts and minds of manufacturers.
Thumping anti-Chinese attitudes is probably counterproductive. They see China as a superior manufacturing chain than USA. Its more important to recognize the reality, and begin to emulate Shenzhen. What can the USA do to "build our own Shenzhen" ??
https://www.npr.org/2011/09/16/140515737/california-turns-to...
"The steel contract went to a state-owned Chinese company, Shanghai Zhenhua Heavy Industries, which had several advantages: modern production facilities, ships to deliver the steel and, of course, low-cost labor."
I would say the cabling of a suspension bridge is pretty important.