China's "Bloodbath" For American Manufacturing
China is planning to take out Ford and others
American manufacturing has long suffered from a government that is not keeping trade predators at bay.
The Chinese seem set on delivering a coup de gras to American auto manufacturers with their latest planned auto manufacturing plant in Mexico–– and little is being done to stop it.
President Trump has rightly identified this as a “bloodbath” for the industry if the next president does not stop it.
True to form the corporate press has attacked Trump’s use of the word “bloodbath,” despite using it for themselves on numerous occasions.
They have misled their audiences away from an examination of the high-stakes and dangerous battle American auto manufacturers are in and instead produced an erroneous story that made it sound like the former President was calling for war.
Since the 1990s the American business establishment has considered it a virtue to expose our domestic manufacturers to the dragons and rattlesnakes of China and Mexico through “Free Trade”, most favored nation trading status, and lax trade enforcement policies.
Except for an aberrational period during the Trump presidency, the policy of every president from George H.W. Bush to Joseph R. Biden has been to not fend off trade predators.
This has allowed Mexico to attract more than 1 Million American jobs since NAFTA was signed and for China to obliterate the industrial base in the Midwest and Deep South.
Now, Mexico and China are forming a deadly nexus.
China has recently announced a new auto plant in Mexico that would put out a whopping 150,000 vehicles a year.
China’s plant would rival Ford’s recently announced expansion of its Dearborn facility in production capacity.
This proposed Chinese plant would combine the Chinese access to capital and manufacturing know-how with the numerous trade advantages of Mexico. Mexico has few protections for workers, the minimum wage is paltry, and employees are afforded few benefits.
This would allow China to pump out vehicles at the same rate as the United States but far cheaper and within a country where we have a Free Trade agreement.
United Auto Workers (UAW) has attempted to intervene given the inaction of the Biden Administration by helping Mexican autoworkers unionize.
In numerous statements, UAW has said that they are taking this action to defend jobs in the U.S.
They believe that corporations are less likely to shift their manufacturing overseas if they have to deal with unions there too.
However, this is merely a Dixie cup attempting to drain a typhoon.
The latest UAW strike was (in part) due to the fact that new workers were still being paid a 17-dollar hourly wage, as part of an austerity measure that was supposed to help the auto companies survive the 2008 crisis.
That hourly wage is greater than the daily minimum wage (equivalent to $14) mandated by Mexican law.
There is only one thing that can dually prevent American automanufacturing jobs from being shipped to Mexico, defend our automobiles from Chinese competition, and generally keep the automobile trade predators at bay; a massive tariff.
Former President Trump has promised a “100% tariff” on Chinese-manufactured cars being made and Mexico and brought into the U.S.
A tariff of this magnitude would double the price of any vehicle brought into the United States.
In theory, this could put a huge burden on consumers but in reality, it would prevent companies from moving manufacturing overseas if they knew their products would be unsellable.
This policy is advisable not only because it makes common sense but also because the 45th President has used successful tariffs to defend American manufacturers before.
In 2017-18, Trump successfully scalped a Samsung washing machine plant from South Korea, bringing it to South Carolina, by imposing a combination of tariffs against foreign competitors in South Korea and Mexico.
Throughout the Trump presidency, there were varying degrees of steel tariffs against China and others.
These tariffs produced a surge in domestic steel production compared to the Obama years, excluded cheap/low-quality foreign steel, and ushered in a trade regime that produced several years with relatively inexpensive steel prices.
Not one inch of foundation has been poured on the Chinese-Mexcian auto manufacturing plant yet.
There is still time to kill it. A tariff imposed today could lead to the shredding of its blueprints tomorrow–– but we must have a president who is willing to take a tough stand against trade predators.
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