Comment by margorczynski
12 days ago
Still, this kind of outsourcing of manufacturing (or even more food production) puts the US in an incredibly uncomfortable position, especially that China is its main geopolitical enemy.
What if a war erupts? Suddenly the US cannot produce a lot of essential stuff - I think Covid was a good example of that happening.
Of course the question is can this be done and what will be the price if so.
What if a war erupts?
I believe we should scale up manufacturing in the US for different reasons.
But I'm also a realist. If war erupts between China and the US, then anyone in the US or China still alive 4 weeks after the start of hostilities will have more pressing concerns than worrying about where things are manufactured. Again, just the reality.
We shouldn't plan on the basis of end of the world scenarios. Rather we should plan on the assumption that we want to confer maximum benefit on the US in likely non-apocalyptic future timelines.
> But I'm also a realist.
A realist would prepare for the worst
The worst is us not being here anymore.
No real need for us to make economic or investment preparations for that eventuality. It does us no good in the life we do have to say, "Well, I can't invest in the US because in the worst case, non of our secret weapons function fully, Russia blows us away, and all my real estate and manufacturing investments go up in smoke." We'd sit around never improving anything, because it will all go away in the worst case.
Best to assume it won't go away because we won't go to war with Russia or China, (or even maybe the EU nowadays? Who knows?). Anyway, we should make investment decisions on the "we aren't gonna go to war" basis. If war happens, well, we're dead and all the investments are destroyed anyway so.. yeah.. nothing you can do. Can't even get out of the continental US in 15 minutes, so you can't even save yourself let alone your investments.
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The author is not anti-US-manufacturing. He explained how the current tariff policy undermines US manufacturers. He is pointing out the obstacles and what we must do to overcome them. The obstacle is the way.
I wouldn't say he is anti-manufacturing but more that he takes a defeatist view.
Two of his points: "Industrial supply chain is weak" and "We don't know how to make it" are exactly the same. >all the factories which make the needed components are in Asia, >because they know how to make the best semiconductors in the world.
But this is looking at the problem and then missing the point: If I decide to start mfg. IPhone in the US, I can't because there are no suppliers.
As long as nothing changes, there will continue to be no suppliers.
If I HAVE to mfg the IPhone in the US, at first I will import due to no supplier but someone will make a local supplier because they can undercut my importer.
Subsidize the essentials let the free market sort the rest. I think we still want competitive markets within our borders for the stuff we subsidize so we don't get stagnation of the industry. Maybe there are clues how it could be structured like we subsidize farming.
Last time I looked the US was a net exporter of agricultural products to China. Well, until the retaliatory tariffs hit.
Food, airplanes, tech IP (eg software, phone designs) are the main exports of the USA to China.