Made in China – The impact of the Trump administration’s trade policy
Bottom Line: Most of the conversation about Chinese trade policy debates is built on hyperbole and politics. In other words, are there real-world implications to what’s been playing out over the past 2+ years. Absolutely. Are those outcomes generally presented to you in an honest, responsible way by news media? Absolutely not. Recall that just six weeks ago your news media and Democrat politicians were saying that President Trump’s increase of Chinese tariffs would result in retaliation in June by China that’d send our economy into recession. Notice how none of that ever happened? Just as the US had record solar production and adaptation in 2018 after the doomsday predictions by these same people based on the administrations Chinese solar tariffs a year earlier. Consider the source comes to mind. Anyway, here’s the thing. We are buying less made in China stuff because American companies are producing less of it there.
That to me is a win. By the numbers...
- 61%: Percentage of goods produced in China by American companies a year ago
- 52%: Percentage of good produced in China by American companies today
There are numerous American companies that have reduced or completely moved manufacturing out of China including... Apple, Crocs, iRobot and Yeti. If you haven’t noticed a huge jump in prices of these items, that’s because there hasn’t been. Many companies who’d been manufacturing in China because it’s the cheapest, hadn’t reevaluated options in years. Changes in technology, production processes and proximity have changed the value proposition. The trade standoff has provided the catalyst for many to review them. There are examples of manufacturing moved to the US from China that’s about cost neutral for example. Yes, the cost of labor and regs is far higher in the US but not having to transport across the world can, for some manufacturing operations create a near-neutral consideration while helping the US economy.