When clowns are running the show, most of the policies
are going to backfire. Clowns do not think forward, only intent on
keeping the audience entertained. They care not about what happens next.
First
of all, sourcing of raw materials will be one big problem for the USA
trying to bring back manufacturing. China now controls most of the
essential raw materials and even the refining logistics. The USA is
trying to put the cart before the horse by frantically building up the
factories from scratch and then trying to source for the raw materials
to operate. It will not work!
Next, we have to look at the
skilled manpower needs which is in short supply in the USA. Training
engineers takes time, and time is not what factories can stay idle and
wait. TSMC, in setting up semiconductor manufacturing in Arizona had to
recruit skilled engineers and technicians from Taiwan to work in the
USA. Here, TSMC encountered another big problem. The work attitudes of
USA locals and imported Taiwan workers contrast like day and night.
Taiwanese work long hours in Taiwan and brought with them the same work
attitude to the USA, but USA workers are basically lazy bums unable to
follow the TSMC work routine. Another rouse that escalated was the
differential in wages paid to USA locals and Taiwanese workers.
With
the wage differentials in mind alone, can products made in the USA be
able to compete in the global market? With the lack of raw materials in
mind, trying to source for cheap raw materials is out of the question
and with more expensive inputs, can the USA hope to compete on the
global market?
China works on a different trajectory. China
thinks long term what it wants to do and plan its move. China trained
all the engineers and stem graduates that it will need for its
manufacturing hub agenda decades ago. In tandem China also sourced for
all the raw materials and secured them under joint ventures will
friendly countries like in Africa also decades ago. China did not do all
this yesterday. China had all these planned decades ago. That is why
China was able to dominate global manufacturing so fast while the USA
was still asleep in the believe that their days of domination will never
end.
Anonymous
2 comments:
John Deere, an agricultural machinery manufacturer is moving the bulk of its manufacturing to Mexico, after more than a century and a half, 187 years to be exact, of production in the USA. Lack of demand and escalating cost were the reasons for the move. This indicates that the USA is no longer the food basket of the world and other countries like Brazil and Russia are muscling in on its turf.
As more of such USA companies moves out to Mexico to take advantage of cheaper wages and better demand, with Mexico becoming the upcoming destination for investors, moving to China is no longer necessary. In fact, Chinese companies have invested substantially in Mexico instead over the years. And Mexicans do not have to suffer trying to enter the USA as more jobs are created in the process, resulting in more misery for USA farmers having to pay higher wages to local helpers. But as time passes, and as Mexico's competition against the USA hots up, USA is going to accuse Mexico of stealing USA jobs and paying slave wages. This is a time-tested temp-plate that the USA used against China and Mexico will not be spared.
For a long-established icon moving out of the USA, the move runs counter to the in- shoring agenda of the USA and indicates the folly of the USA trying to restart manufacturing amidst escalating costs and diminishing demands within the USA.
Trump is again rehearsing his rhetoric of threatening to slap tariffs of 200% on John Deere's machinery if he is elected, which amounts to slapping his own face by targeting his own USA company. Xi must be laughing behind his desk and Putin grinning from ear to ear. This is sending a signal to those unable to survive in the USA today from moving out and forcing them to close shop for good. But either way, it means lots of jobs will disappear for good. Self-foot-shooting is becoming the norm for the USA Muppets.
Think China should let the USA alone to self-destruct and stop talking about trade issues and tariffs. Let the USA erect tariffs to the stratosphere and hurt its own people. Just de-couple and be done with it. Business with BRICS countries is more than enough to compensate.
There is a big market outside of the USA. There are good investment opportunities outside the USA that are safer, less risky from sanctions and seizures and helps poorer countries to progress.
Why let companies go to the USA, invest in the USA, and yet be looked upon as an enemy to be destroyed.
China should just stand aside and watch how the USA is escalating its self-destruction mode with all the miscalculations, inflicting self-harm and trying to blame others. More and more countries are ignoring the USA and its tantrums. It is behaving like a spoilt brat and unbecoming of a global superpower to be looked up to.
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