4 ms·

Protecting local manufacturers from cheap offshore labor is rational, especially if the offshore products are being subsidized specifically to undermine incumbe

Protecting local manufacturers from cheap offshore labor is rational, especially if the offshore products are being subsidized specifically to undermine incumbents and put them out of business. I get that individual consumers want the cheapest trinket they can find, but the gov't has to be more strategic. And every country does this, including the one that would be the source of these trinkets.

newyankee 2y ago
Subsidy cannot work beyond a certain scale. Sure they may have benefitted initially, but in the long run I presume they need some kind of profits to sustain. May be the lead in Chinese EV and battery industries is not purely technological, it is also the supply chain and scale developed over the years. All this talk assumes that USA or Western countries have always had a level playing field whereas companies like Boeing or Airbus are prime counter examples
- rootusrootus 2y ago
  > All this talk assumes that USA or Western countries have always had a level playing field whereas companies like Boeing or Airbus are prime counter examples As I said, every country does it. It is rational to protect your own manufacturing industry. China does it. We do it. European countries do it. Just because we protect our own industry does not mean we have to protect China's interests too. That's their problem.
  - elashri 2y ago
    The problem is that the US is complaining a lot about that when it is the other countries doing that. Even here, average commentator will call it a foul (whataboittism) if you point out that. You can't eat the cake and have it. Either you follow the fair trade requirements or don't complain about others not doing the same. If you say standards, then follow by lead and respect them. Also I do not think every country does that. There are too much pressure by the US, China and EU on these countries to prevent many from doing that.
    - NotSammyHagar 2y ago
      The us of course subsidizes our manufacturing (whatever is left of it), just like many other countries. I don't know if our $7500 tax rebates on locally made EVs with non-chinese batteries compare to Chinese govt subsidies. But it's clear that EVs are going to be much much cheaper to make, maintain, and recycle over time. This is a threat to all kinds of incumbents. We face the destruction of a lot of our manufacturing industrial base if we don't convert some more of it to EVs, and this will also be destabilizing to our politics. Add on the enmity of the gas and oil industry (helped a tiiiny bit by Trump's victory).
      - elashri 2y ago
        The US is subsiding a lot of industries. Aviation, agriculture (specially agricultural exports), transportation and energy. They just introduced CHIPSA act to promote US companies chipa production and a lot more. When china does this (which is does) then this is far cry and outright harmful for international trade. Lets get out of comparison between US and China. Smaller countries will be hit hard (even with sanctions) if they try to do something from that. The point here is that the US, China shouldn't try to prevent other countries from doing what they are doing and forcing them to harm their local economy and open markets under the disguise of free trade.
- nytesky 2y ago
  No, they do not need long term profits to sustain, at least in certain regimes.
AnotherGoodName 2y ago
It leads to market separation. No one outside the US will buy US made when they have cheaper Chinese cars as an option. And the US can’t force external competitiveness to emerge with those subsidies in place. Not to mention internally having to buy more expensive transport has knock on effects to the entire economy.
- MR4D 2y ago
  In a way, that doesn’t matter for the US. Consider that the US has an enormous trade deficit. If the US brought to even, then all those exporting countries with large surpluses would be in bad shape. This is a complex problem, and when the US is the importer from the world, the mere decision to stop importing would send shockwaves through trade everywhere.
  - InDubioProRubio 2y ago
    The problem is -the us exports one thing en mass- security. And its starting to use that for shakedowns- which is the moment everybody becomes his own sheriff.
    - pfdietz 2y ago
      And at this point that would also benefit the US. That mass security is not cheap.
  - lossolo 2y ago
    If you are running $2 trillion deficits, then of course you will have trade deficits. You are an importer of goods and an exporter of USD. The problem will arise when your debt becomes unsustainable and alternatives to the USD emerge for settling international trade. This would lead to a decline in demand for USD, a drop in demand for U.S. debt, and reduced capital inflow into the U.S. stock market (end of recycling), essentially leading to a collapse of the current U.S. economic model.
NelsonMinar 2y ago
Do you think this argument applies to microprocessor manufacture?
- rootusrootus 2y ago
  To the extent that those microprocessors are necessary for war, sure.
downrightmike 2y ago
The only thing locally made is the bare minimum to make it "Made in USA", but everything is heavily outsourced already. There is no point to your argument, as that battle was lost a long time ago.
- rootusrootus 2y ago
  The assembly line process itself is a big strategic value. And just because we don't manage to source every individual part exclusively from USA labor doesn't mean we should just throw in the towel and completely give up on our ability to make machinery.
glial 2y ago
I exclusively buy Toyotas because they are cheaper to maintain than American cars. Is your argument that I shouldn't have access to Japanese cars either? I understand the desire to have a strategic reserve of manufacturing capacity. However, the US also subsidizes the US auto industry heavily by e.g. bailing out GM and Chrysler. It frustrates me that US car manufacturers continue to make exclusively heavy, low-efficiency vehicles. Give me something inexpensive, safe, efficient, reliable, and I'll buy it.
- InDubioProRubio 2y ago
  The protectionism there deformed the product and thus, the limited offerings are a result of the inability to compete in these segments.
  - sleepybrett 2y ago
    The product deformed due to lack of ingenuity related to the CAFE standards.
- Rebelgecko 2y ago
  Most (maybe all?) Toyota in the US are actually made in America. If you look at the various "Made In America" indexes that take into account factories, supply chain, etc, the Camry does better than anything from Detroit
  - isanengineer 2y ago
    There's some interesting history here. Toyota started manufacturing in North America in the 70s-80s largely due to pressure from the US government in the form of tariffs and import restrictions. For example, from https://en.wikipedia.org/wiki/Toyota_Motor_North_America https://en.wikipedia.org/wiki/Toyota_Motor_North_America: "Toyota’s first manufacturing investment in the United States came in 1972 when the company struck a deal with Atlas Fabricators, to produce truck beds in Long Beach, in an effort to avoid the 25% "chicken tax" on imported light trucks." ... "After the successes of the 1970s, and the threats of import restrictions, Toyota started making additional investments in the North American market in the 1980s. In 1981, Japan agreed to voluntary export restraints, which limited the number of vehicles the nation would send to the United States each year, leading Toyota to establish assembly plants in North America." The book "The Machine That Changed the World", while a bit dated, gives a great overview of the history of Toyota from US automaker perspective.
casey2 2y ago
What is a "local manufacturer" some other multinational corporation? At least think about your bullshit propaganda before you repeat it.
ricardobeat 2y ago
The current average monthly salary in China is $3000-$4000 US dollars. This is not about cheap labour anymore but simple economies of scale. The whole talk about subsidies is pure smoke screen. US automakers have received a lot more subsidies than their Chinese counterparts. The top chinese firm receiving government subsidies, CATL, got ~$500M USD last year. BYD is said to have received $3.5 billion in total in its lifetime. In the meantime, the US government offered $12B just last year for automakers to start making more EVs, and Ford is reported to have received a total of $33B in loans, bailouts and tax rebates. In any case, if you could put down $3.5B and get a BYD out, everyone would be doing it, reality is a bit more complex than that.
- somerandomqaguy 2y ago
  ??? The average BYD line autoworker earns $640 to $840 USD a month, but that require overtime; 1.5x pay on weekdays and 2x pay on weekends. BYD Wuxi workers went on strike in 2021 because BYD was trying to restructure to eliminate overtime, which would effectively drop the workers wage to under $400 USD a month.
  - ricardobeat 2y ago
    Which is about the same a factory worker in Mexico, building the Ford Mach-E, makes. I imagine the purchasing power in China will be a lot higher. China currently has multiple times higher costs than countries like Vietnam. Cheap labour is not a major factor anymore.
- ailun 2y ago
  > The current average monthly salary in China is $3000-$4000 US dollars. Source, please. I do not believe this.
  - presentation 2y ago
    Yeah doesn’t look true, median is more like $800 for those in private companies. https://finance.sina.cn/2024-05-19/detail-inavuhsp2237661.d.html https://finance.sina.cn/2024-05-19/detail-inavuhsp2237661.d....

newyankee 2y ago

Subsidy cannot work beyond a certain scale. Sure they may have benefitted initially, but in the long run I presume they need some kind of profits to sustain. May be the lead in Chinese EV and battery industries is not purely technological, it is also the supply chain and scale developed over the years. All this talk assumes that USA or Western countries have always had a level playing field whereas companies like Boeing or Airbus are prime counter examples

rootusrootus 2y ago
> All this talk assumes that USA or Western countries have always had a level playing field whereas companies like Boeing or Airbus are prime counter examples As I said, every country does it. It is rational to protect your own manufacturing industry. China does it. We do it. European countries do it. Just because we protect our own industry does not mean we have to protect China's interests too. That's their problem.
- elashri 2y ago
  The problem is that the US is complaining a lot about that when it is the other countries doing that. Even here, average commentator will call it a foul (whataboittism) if you point out that. You can't eat the cake and have it. Either you follow the fair trade requirements or don't complain about others not doing the same. If you say standards, then follow by lead and respect them. Also I do not think every country does that. There are too much pressure by the US, China and EU on these countries to prevent many from doing that.
  - NotSammyHagar 2y ago
    The us of course subsidizes our manufacturing (whatever is left of it), just like many other countries. I don't know if our $7500 tax rebates on locally made EVs with non-chinese batteries compare to Chinese govt subsidies. But it's clear that EVs are going to be much much cheaper to make, maintain, and recycle over time. This is a threat to all kinds of incumbents. We face the destruction of a lot of our manufacturing industrial base if we don't convert some more of it to EVs, and this will also be destabilizing to our politics. Add on the enmity of the gas and oil industry (helped a tiiiny bit by Trump's victory).
    - elashri 2y ago
      The US is subsiding a lot of industries. Aviation, agriculture (specially agricultural exports), transportation and energy. They just introduced CHIPSA act to promote US companies chipa production and a lot more. When china does this (which is does) then this is far cry and outright harmful for international trade. Lets get out of comparison between US and China. Smaller countries will be hit hard (even with sanctions) if they try to do something from that. The point here is that the US, China shouldn't try to prevent other countries from doing what they are doing and forcing them to harm their local economy and open markets under the disguise of free trade.
nytesky 2y ago
No, they do not need long term profits to sustain, at least in certain regimes.

AnotherGoodName 2y ago

It leads to market separation. No one outside the US will buy US made when they have cheaper Chinese cars as an option. And the US can’t force external competitiveness to emerge with those subsidies in place. Not to mention internally having to buy more expensive transport has knock on effects to the entire economy.

MR4D 2y ago
In a way, that doesn’t matter for the US. Consider that the US has an enormous trade deficit. If the US brought to even, then all those exporting countries with large surpluses would be in bad shape. This is a complex problem, and when the US is the importer from the world, the mere decision to stop importing would send shockwaves through trade everywhere.
- InDubioProRubio 2y ago
  The problem is -the us exports one thing en mass- security. And its starting to use that for shakedowns- which is the moment everybody becomes his own sheriff.
  - pfdietz 2y ago
    And at this point that would also benefit the US. That mass security is not cheap.
- lossolo 2y ago
  If you are running $2 trillion deficits, then of course you will have trade deficits. You are an importer of goods and an exporter of USD. The problem will arise when your debt becomes unsustainable and alternatives to the USD emerge for settling international trade. This would lead to a decline in demand for USD, a drop in demand for U.S. debt, and reduced capital inflow into the U.S. stock market (end of recycling), essentially leading to a collapse of the current U.S. economic model.

NelsonMinar 2y ago

Do you think this argument applies to microprocessor manufacture?

rootusrootus 2y ago
To the extent that those microprocessors are necessary for war, sure.

downrightmike 2y ago

The only thing locally made is the bare minimum to make it "Made in USA", but everything is heavily outsourced already. There is no point to your argument, as that battle was lost a long time ago.

rootusrootus 2y ago
The assembly line process itself is a big strategic value. And just because we don't manage to source every individual part exclusively from USA labor doesn't mean we should just throw in the towel and completely give up on our ability to make machinery.

glial 2y ago

I exclusively buy Toyotas because they are cheaper to maintain than American cars. Is your argument that I shouldn't have access to Japanese cars either? I understand the desire to have a strategic reserve of manufacturing capacity. However, the US also subsidizes the US auto industry heavily by e.g. bailing out GM and Chrysler. It frustrates me that US car manufacturers continue to make exclusively heavy, low-efficiency vehicles. Give me something inexpensive, safe, efficient, reliable, and I'll buy it.

InDubioProRubio 2y ago
The protectionism there deformed the product and thus, the limited offerings are a result of the inability to compete in these segments.
- sleepybrett 2y ago
  The product deformed due to lack of ingenuity related to the CAFE standards.
Rebelgecko 2y ago
Most (maybe all?) Toyota in the US are actually made in America. If you look at the various "Made In America" indexes that take into account factories, supply chain, etc, the Camry does better than anything from Detroit
- isanengineer 2y ago
  There's some interesting history here. Toyota started manufacturing in North America in the 70s-80s largely due to pressure from the US government in the form of tariffs and import restrictions. For example, from https://en.wikipedia.org/wiki/Toyota_Motor_North_America https://en.wikipedia.org/wiki/Toyota_Motor_North_America: "Toyota’s first manufacturing investment in the United States came in 1972 when the company struck a deal with Atlas Fabricators, to produce truck beds in Long Beach, in an effort to avoid the 25% "chicken tax" on imported light trucks." ... "After the successes of the 1970s, and the threats of import restrictions, Toyota started making additional investments in the North American market in the 1980s. In 1981, Japan agreed to voluntary export restraints, which limited the number of vehicles the nation would send to the United States each year, leading Toyota to establish assembly plants in North America." The book "The Machine That Changed the World", while a bit dated, gives a great overview of the history of Toyota from US automaker perspective.

casey2 2y ago

What is a "local manufacturer" some other multinational corporation? At least think about your bullshit propaganda before you repeat it.

ricardobeat 2y ago

The current average monthly salary in China is $3000-$4000 US dollars. This is not about cheap labour anymore but simple economies of scale. The whole talk about subsidies is pure smoke screen. US automakers have received a lot more subsidies than their Chinese counterparts. The top chinese firm receiving government subsidies, CATL, got ~$500M USD last year. BYD is said to have received $3.5 billion in total in its lifetime. In the meantime, the US government offered $12B just last year for automakers to start making more EVs, and Ford is reported to have received a total of $33B in loans, bailouts and tax rebates. In any case, if you could put down $3.5B and get a BYD out, everyone would be doing it, reality is a bit more complex than that.

somerandomqaguy 2y ago
??? The average BYD line autoworker earns $640 to $840 USD a month, but that require overtime; 1.5x pay on weekdays and 2x pay on weekends. BYD Wuxi workers went on strike in 2021 because BYD was trying to restructure to eliminate overtime, which would effectively drop the workers wage to under $400 USD a month.
- ricardobeat 2y ago
  Which is about the same a factory worker in Mexico, building the Ford Mach-E, makes. I imagine the purchasing power in China will be a lot higher. China currently has multiple times higher costs than countries like Vietnam. Cheap labour is not a major factor anymore.
ailun 2y ago
> The current average monthly salary in China is $3000-$4000 US dollars. Source, please. I do not believe this.
- presentation 2y ago
  Yeah doesn’t look true, median is more like $800 for those in private companies. https://finance.sina.cn/2024-05-19/detail-inavuhsp2237661.d.html https://finance.sina.cn/2024-05-19/detail-inavuhsp2237661.d....