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Taking the Over View

When you examine history from a bit of distance, you can often see the ‘lead up’ to the result.  For example, the  Current ‘Trade’ Imbalance.

In the 1970s there was a town I visited in the West of America.  There was a factory which ran 24/7 and employed 10k people.   The factory had opened in the 1940s and out of what had been farm landm grew a town.

The people who worked at the factory brought their families, so there was a building boom, Then came the various amenities.  An entire town, from supermarket to movie theatre to school to doctor to diner to car lot grew in the town to serve the people.

Then,  in the mid 1970s, the people in charge of the factory decided to move it to Asia where labour was cheaper.

The town began to die when the factory was gone.

This pattern has been repeated all over America.

This movement of business abroad, whether in whole or in part due to cheaper labour costs. This what has caused the ‘imbalance’.   It was not done by outsiders, it was done by American capitalists who put profit above people.

To think imposing tariffs would assist is like stopping a nose bleed by cutting your throat.

Firstly, a lot of what is built in China is for American manufacturers.   Many of the clothes Americans wear were not made in America;  they may have been cut into the pattern in America, but are stitched in another country.

Secondly,  Chinese products fill the shelves in over 124 nations with their cheap goods.  There is no market for American goods.

Beyond the rich and pretentious, who would pay $178 for Levis when they can get a Chinese knock off for $15?

If Americans had not moved so many factories overseas,  there would be more jobs in America (and probably more illegal immigrants who don’t have to be paid minimum wage) and more American products on the shelves.

The Trade Imbalance will not be solved by tariffs; it will only make products more expensive in the U.S. and cheaper in the rest of the World while China retools to deal with a somewhat smaller market.

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What do you think?

Written by jaylar

2 Comments

  1. You find that a lot in England too that companies are moving overseas because it’s cheaper. You also find that when you phone services up, like your mobile phone provider they come from places like India and China too.

    • Exactly. The call centres are abroad… in Jamaica we have call centres from American companies. Our labour is cheaper so Reader’s Digest, for example, has it’s billing department at a free zone in Montego Bay