anything made in US anymore?

[Bill M of NJ]

NAFTA made it easy for companies to manufacture outside our borders, I was a NAFTA casuality, on my feet these days but I was lucky enough to be a good toolmaker/machinist to survive. I read in a manufacturing magazine that a large company would love to come back to the USA because it would be cheaper, problem is in China they can fill a city with toolmakers and machinists, but here in the USA they are lucky to fill a hotel room, so they stay in China. Not sure if I buy that but it must have some truth since most people have no idea what I do for a living.

[MrSplitshot]

A different spin...

In the early 2000's, my industry (tires) saw a huge influx of tires into the US that were being manufactured in China. Off brand, low quality, no warranties...just cheap crap that was killing US Manufacturers. To compete, the U.S. Manufacturers were having to look outside the U.S. for production themselves, jobs lost. When folks would go to buy tires for their vehicle, a good many were choosing the Chinese imports because they were drastically cheaper than the domestic product. Americans want cheap products....just ask Wal-Mart.

Obama, in one of his first trade policy decisions, established a Tariff on Chinese import tires in September of 2009. It was 35% the first year, 30% the second, and 25% the third. This made the US Steelworkers union very happy. (Steel cord in tires.) While it's debatable how many jobs that decision actually saved in the US (some estimate only 1200 jobs), what it did do was bring the tire market in the US to higher pricing. Consumers surely noticed it...and hated it...because tire prices went up, up, up...because they could. There was no competition from China. Tire manufacturers and tire distributors loved it, because any inventory we had on hand at old money appreciated when the prices went up...we made a bit more profit for awhile. By the time you figured the cost of the tariff on tires coming in from China, the American manufacturers could compete with their economy line products and could in fact raise prices on their higher quality lines. (There were also some drastic raw material price increases in there too, like the cost of natural rubber...so it wasn't all the tariff.)

So we saved an estimated 1,200 jobs...but consumers, by some estimates, paid well over $1 Billion dollars in the market on higher prices. That means it cost the American consumers $900K per job saved. Hmmph. If you bought tires for your car or truck in the last couple of years, you know what I mean. Thanks.

Now, that tariff is set to expire in September...and we're already seeing the tire market start to go crazy again. Our industry is waiting to see if Obama makes a move to extend it...in an election year...as appeasement to the unions. In the meantime, Chinese suppliers are sending us price sheets for tires that we can order now that will be built and shipped across the water to us after the tariff is lifted that are 20-30% reductions to the prices that folks have been paying over the last 3 years.

Now, all of that crap is smoke and mirrors. The real question is WHY is it so much cheaper to build tires in China? Quality is actually improving over there in tire plants. Some of the tires actually perform quite well. The cost difference isn't so much labor anymore - It's taxes. On one hand, US companies pay more taxes than any other country in the world. Chinese companies don't, so you've got an advantage from the get-go. The playing field between US and China in regards to trade is not a level one. Companies that make products in the US and try to export them to China to sell in the Chinese economy face heavy border taxation...they pay a ton of taxes to get the products into China. However, on the flip, companies that manufacturer in China and export to the US pay virtually no taxes. They pay a value-added tax to the Chinese government, but I believe that is even rebated to them if they are exporting to the US. It is estimated that something like 20% of China's government revenue is from import taxation...and their export taxation is next to nothing. Couple the tax advantages with what has been cheap labor and an abundance of workers, and boom...make more money manufacturing in China and shipping to the US...and it's easy to sell the products, even if they ****, because a lot of American consumers want to pay for tires on the cheap. The Wal-Mart society wants it now and wants it for pennies.

When competition is restricted (tariff on Chinese imports), prices go up. That's basic Supply and Demand theory.

When competition is free flowing, in a vacuum all other things equal, prices go down, consumers win...and the companies with the best products and best practices survive...so industry wins too. The problem is that we're not in a vacuum...all things aren't equal...and because of gubment taxation in the U.S, the deck is stacked against American Manufacturers in the domestic and global market before the first product is made. It's like lining up to run a marathon and your coach breaks your ankle before the starting pistol fires - Now get out there and compete!

[DJD]

Some of the water treatment plants we are working on require you to install products that are made in the USA. My portion of the project could have 20 different manufactures that i have to research before I can quote their product It about drove me nuts trying to find items with specification sheets that were made in the USA. I had to call many manufactures more than once to get the exact wording included in their letter that they were compliant. It's an eye opener for sure.