> America did it to itself.
Corporations outsourced manufacturing to China, because American corporations are independent from the US government and profit-motivated.
Corporations outsourced manufacturing to China, because American corporations are independent from the US government and profit-motivated.
American citizens could have voted with their wallets, and they could have voted at the booths to elect governments that would regulate the flow of American jobs overseas. But they didn't, and so here we are.
In the Chinese system, that's the market but always capped by political and CCP decisions, if they deign to care.
In the American system, that's resolutely only the market. The government has some limited second order control (tariffs, industrial policy, national security exclusions), but generally didn't use them against China 1990-2018.
Ergo, the deciders moving manufacturing to China were the CEOs of American companies, optimizing their own production costs.
I'd be curious to see an analysis of the rise of Walmart (and immolation of Sears) and later Target vis-a-vis Chinese manufacturing of consumer goods sold in America. I'd be surprised if the centralization of point-of-sale (vs previous more diverse and independent stores) didn't incentivize bulk, low-cost offshore manufacturing via volume.
So it's really more accurate to say that America chose to allow it to be profitable for corporations to outsource. Government policy could easily have been the opposite. So ultimately, America did do it to itself.
(BTW I'm not arguing this would have necessarily been good policy. Just that it is very much an explicit governmental decision.)
That's not how the world works. It takes years to switch a manufacturer depending on terms, who owns the molds, etc.
Placing tarrifs on China hurts American consumers. Instead, there should be tax incentives for producing stateside.
> It's the US companies that pay the tarrifs.
No, customers pay the tarriffs at the end of the day. Companies raise the prices of imported goods to cover the tarriffs, and tarriffs in this case are set so that the final retail price of imported goods matches (or exceeds) the domestic manufacturing price.
> The concept of 'if we increase the tarrifs, US manufacturing will come back"... It takes years...
The idea is generally to have tarriffs from the beginning so manufacturing never leaves. Because you're right, otherwise it does take years.
> Placing tarrifs on China hurts American consumers. Instead, there should be tax incentives for producing stateside.
There's no difference, they harm consumers equally. Corporate tax incentives mean reduced government income which needs to be made up for with... higher personal taxes. Or higher corporate taxes in other sectors which lead to higher prices. No matter what, the consumer is paying.
Tarriffs or tax incentives have the same effect, but tax incentives are usually much more difficult to design and limit corporate flexibility in bad ways that are hard to foresee. Tarriffs have much more reliable enforcement and predictable effects.
This depends on the product and the type of demand. If it's inelastic, yes. if it's consumer focused, yes. But most of the time that's not the case. Tarrifs on material exports ar b2b, where pricing agreements are common.
At the end of the day, tarrifs create downward pressure on companies profit margins. If you instead, gave incentives it would put upward pressure on the companies who created fucundity for the economy.