Well, esteemed readers, you’ve already heard about China and the United States’ ongoing trade war. It’s an economic conflict borne of rising protectionism between two nations that are hashing it out for the winning spot in the first trade-based Royal Rumble of the 21st century. So I needn’t bore you with the basics on that one. Whether you agree with the underlying principles or not, the trade war has done one good thing; it has shone the limelight on the notion that the U.S. needs to reduce its dependency on Chinese manufacturing for strategic goods. And, in 2020, as COVID-19 struck the global stage, politicians realized that we really do need to take action ─ so now they’re vowing to do so.
But I have to ask… do you think we can actually change anything? Because I’m starting to believe that President Donald Trump’s administration and its hunger for dominance is admirable but decidedly moronic. It seems to me that the baseline principles, understanding, and demands of the current administration reveal a fundamental issue in the higher echelons of the United States: it is stuck in a world, pre-1960s, where a country produces a product and ships directly to another.
Get With The Times And Get Global, Trump!
In the 60s, we saw the introduction of containerized shipping, and then the provision of the Internet for public use in the 90s. These two advancements made a massive difference to the supply chain, revolutionizing systems, and unlocking access to a wider world. One that features a complex and sophisticated web of global manufacturers providing goods and services interdependently, not independently. Unfortunately, Donald’s trumpets sound loudest for an archaic system that once served a purpose in the evolution of the global supply chain, but is now outdated and past its use-by-date.
We can talk about making America “great again,” and we can listen to the current president’s warped view of global trade. We can guzzle down the “it’s them or us” claptrap that is firing up the underbelly of U.S. industry, and we can cry as much as we like for the loss of domestic business. But the fact of the matter remains, the lines that fuel the flames of the debate, “made in America” and “made in China,” mean the very same thing: “Made on Earth.” Today’s global economy is one of diversity, where cross-border collaboration and unity stand tall, and it is not a place for the division and segregation that the U.S.-China trade war, courtesy of Trump’s administration, endorses.
Admirable Aims, Reticent Reason
The current administration isn’t completely backward with trade, though, and has already publicly announced that the U.S. needs a group of Asian nations that could group together to supply them, as well as the rest of the world, with essential goods. And the president himself told a reporter that, if he severs the relationship with China, it’ll save $500 billion; so, if you put two and two together, you can clearly see how this would work. But there’s a problem. Although the United States has successfully pulled small elements of the tech supply chain away from China’s hold, it’s a massive task, trying to restructure the entire network.
The view from government officials in the Asia Pacific region, where manufacturing is on the rise, is overwhelmingly negative and suggests that the American dream of simply dismantling the current status quo to suit political ambitions is just a far-off fantasy. And they certainly can’t attempt to untangle the web in a world where businesses are struggling to survive, courtesy of COVID-19.
Sort of Leaving China Behind
However, the pandemic itself is, in some ways, pushing things in the direction that the Trump administration would like. How? By rapidly speeding up a change that was already underway ─ a slow and steady withdrawal of lower-value manufacturing from China’s grasp by many nations, as a consequence of the Eastern powerhouses rising wages and production costs. That natural transition by some of the world’s biggest businesses was apolitical, and wholly economically fuelled, as it should be.
The conscious uncoupling between China and other countries for certain products is something that had to happen, and I believe that China knew it all along. As their volume of export and economic power grew exponentially, they were always going to be forced to, let’s say, “westernize” the workplace standards and regulations across the nation to maintain client relations, pricing them out of some manufacturing gigs.
Nope, Not Really!
Even if we all unanimously agree to pull out from China tomorrow, it just wouldn’t make sense to do so. The cost of production has risen slightly, and there are political tensions between the nation and its Western counterpart, but whatever we say or do, it will remain unmatched as a manufacturing hub, and no other country will ever have as many skilled workers at its disposal. And even if there is a lot of pressure from a particular government or administration or a more economically prudent solution, the development of global industry and supply chains is usually determined by market forces and profitability for businesses. The Chinese domestic market is immense and multiplying ─ it’s a no-brainer for organizations to maintain their ties, and contrary to economic law to sever them.
But let’s be real for a moment… even if the West does rinse its hands of Chinese manufacturers on the face of things, the next best options are scattered throughout Southeast Asia ─ a region that thrives only because of China’s rise to manufacturing dominance. So, in truth, wherever the United States looks, China is waiting to lend a helping hand.