Trump promised voters tariffs are a panacea for the economy, but Walmart finance chief John David Rainey warned they will be inflationary for customers.
This is largely accurate unfortunately.
A good example is Apple. They tried to make a high-end desktop computer manufactured in the US. To do this they needed a specific type of screw. In the area near their factory, they only found one machine shop that could make the screw and they could guarantee an output of 50 screws per day after a 3 week lead time to tool up. And that was the final offer.
When they finally moved to China, they submitted the same request. Multiple vendors appeared offering thousands of screws per day and if they wanted to place a bigger order the company would set up a new factory just to produce those screws and could output tens or hundreds of thousands per day depending on requirements.
Another example is the iPhone and Gorilla Glass.
There were a few Chinese companies in the running to manufacture the glass panel that would go on top of the phone. The one that got the contract, in anticipation of getting the contract, had already purchased the machine to form the glass and had samples ready for inspection at the contract signing.
We have allowed our business climate to become so bogged down in red tape and liability and lawyers and insurance, that most American companies are simply unable to execute at the same speed as China when it comes to manufacturing.
I would absolutely love to get more manufacturing back in the US. But the process of outsourcing is not going to get unwound overnight. It took two decades to move everything to China, even if the whole country agreed that was a mistake it would take another two decades to bring it back.
Because as the Apple screws demonstrate, it’s not just about the factory that produces the widget. It’s about everything that goes into that factory, the companies that make the parts and the screws and the plastic. When you deal with China, they are all right there and they are all ready to go. Same can’t be said for the US.
While youre correct, it’s worth noting that alot of the reason China can outmanufacture us is the lack of those sane regulations. Nets for suicidal factory kids and all that. Thing is, the tarrifs also arent just being applied to slave wage countries, but the entire world basically
This is largely accurate unfortunately. A good example is Apple. They tried to make a high-end desktop computer manufactured in the US. To do this they needed a specific type of screw. In the area near their factory, they only found one machine shop that could make the screw and they could guarantee an output of 50 screws per day after a 3 week lead time to tool up. And that was the final offer.
When they finally moved to China, they submitted the same request. Multiple vendors appeared offering thousands of screws per day and if they wanted to place a bigger order the company would set up a new factory just to produce those screws and could output tens or hundreds of thousands per day depending on requirements.
Another example is the iPhone and Gorilla Glass. There were a few Chinese companies in the running to manufacture the glass panel that would go on top of the phone. The one that got the contract, in anticipation of getting the contract, had already purchased the machine to form the glass and had samples ready for inspection at the contract signing.
We have allowed our business climate to become so bogged down in red tape and liability and lawyers and insurance, that most American companies are simply unable to execute at the same speed as China when it comes to manufacturing.
I would absolutely love to get more manufacturing back in the US. But the process of outsourcing is not going to get unwound overnight. It took two decades to move everything to China, even if the whole country agreed that was a mistake it would take another two decades to bring it back. Because as the Apple screws demonstrate, it’s not just about the factory that produces the widget. It’s about everything that goes into that factory, the companies that make the parts and the screws and the plastic. When you deal with China, they are all right there and they are all ready to go. Same can’t be said for the US.
I was sorta on board until you blamed regulations as a reason businesses can’t have manufacturering I. The US.
Regulations are written in blood. Stop pretending like a living wage and no slave labor is a bad tbi g inhibiting production.
Tarrif the snot out of the slave wage countries.
While youre correct, it’s worth noting that alot of the reason China can outmanufacture us is the lack of those sane regulations. Nets for suicidal factory kids and all that. Thing is, the tarrifs also arent just being applied to slave wage countries, but the entire world basically
Unfortunately, the United States is also a slave country within it’s prison system.
Want a slave? Just trump up some nebulous charges about them, so to speak. Profit.