China Trade Policies
The Trump Administration claims the reason for the trade imbalance with China is because China takes advantage of the United States with its trade policies and the United States lets them get away with it.
Is that the only reason there is a trade imbalance? Could it possible be that United States manufacturing facilities, workers and managers cannot compete with China and many other country’s when manufacturing products and goods? Could it be because U.S. salaries are up to ten times higher then they are in the countries we are competing with? Could it be that much of the U.S. manufacturing infrastructure is in disrepair along with the supporting supply chains?
China was a fiscal basket case in 1980 when it abandoned communist central control of everything and adapted a form of communist capitalism. The Chines economy has been on a tear since that time and have built a manufacturing juggernaut
Labor Intensive Manufacturing
Is there any chance that the U.S. could again become a manufacturing power house. Well yes, but not by imposing tariffs on imports, or threatening our competitors. We can only become a manufacturing power house by out-competing our competition. Is that possible. Well, yes. The only way to do it is automation. Eliminating the advantage of cheap labor by eliminating the cost of labor in manufacturing. When labor becomes an insignificant factor in the cost of manufacture, other factors, such as transportation, access to resources, source of market, product design, innovation, marketing become more important.
One might question why promote manufacturing if it will not increase employment. It is true, the use of humans in the actual manufacturing process in the future will become insignificant. However, the support of automated manufacturing such as providing the materials needed, distribution of the output, upkeep of the automated factory equipment, adding manufacturing capability, replacing obsolete factories and equipment will generate a lot of high value jobs. Another reason is national security. This planet will not achieve global brotherhood anytime soon and being capable of manufacturing critical items needed for defense is important and one not being met in a number of cases currently. Finally, converting raw materials into manufactured products generates wealth, which if properly used, can address many of the countries social disparities.
The United States will not regain its manufacturing power by accident. It will have to be a national priority with the nations resources being directed by Washington to make this happen. Private businesses will not make this happen. Private business priority is profit, not the nations future, and having the manufacturing done where it is most profitable is its priority.
The Chines understand what is happening and are making manufacturing automation a priority. The United States must make this a national priority if we want to be in the game.
Brand new Honda Motorcycle Plant Built in China
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Jobs For Those Displaced by Automation
Some people have suggested that government jobs similar to those created during the Great Depression to build and repair infrastructure would absorb workers replaced by automation. I grew up during the Great Depression. Many of my uncles and aunts depended on the dollar a day paid by the WPA (Works Progress Administration) to survive. The primary purpose of the WPA was not to build infrastructure but to put some money into the pockets of desperate people. It was a solution to a temporary problem. Automation is not a temporary problem. Automation will replace human labor of a repetitive nature around to globe permanently. An interesting solution to the problem is to provide what is equivalent to a living wage to every adult citizen. You can earn more but in any case would never have less than the equivalent of a living wage.
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Alfred Wellnitz Books 