The Impact Of The Trump Administration’s Trade Policy

Most of the conversation about Chinese trade policy debates are 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 presented to you in an honest, responsible way by news media? Absolutely not. Earlier this year, news media and Democrat politicians were saying that President Trump’s increase of Chinese tariffs would result in retaliation in June by China that would 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 administration's Chinese solar tariffs a year earlier. 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 and the numbers show it. 61% of goods produced in China by American companies a year ago while only 52% of goods have been produced in China by American companies today.

There are numerous American companies that have reduced or completely moved their 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 were manufacturing in China because it’s the cheapest, but they 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 cost-neutral. 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. 

Photo by: illustration by Joe Raedle/Getty Images

 

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