Companies look for places to make their products. One thing they look for is low wages. They used to find them in China. What was true in business five years ago may not be true today.
Today, China is losing jobs. Some factories are not in use. Jobs are going to other countries such as Vietnam, Cambodia, and Ethiopia. Foxconn is one of China’s biggest companies. It makes iPhones. It is opening twelve new plants. The new plants are in India.
Wages are rising in China. It is making it harder for it to compete. For example, China’s share of clothing exports to the U.S. is going down.
Chinese factories are trying to find workers. Chinese workers no longer want assembly line jobs. That means factories have to offer higher wages to attract workers.
New ways of making products are bringing jobs back to the United States. More companies are “reshoring.” They are moving jobs back to the U.S. An expert said, “The U.S. now is in a very favorable position.”
The candidates do not support a new trade agreement with Asian countries. Trade agreements are mostly for big business. They tend to overlook workers. Experts say it may be time to take a second look at the Asian agreement. It is not the time to toss it away.
Republicans used to like trade deals because they helped businesses. Donald Trump says, “China is cleaning our clock” with cheap goods. He is not for the new deal. Mr. Trump also ignores the fact that our economy is strong.
Democrats do not like trade deals because they hurt workers In the U.S.
More people and countries are trading. There is no way to stop that trend. The task has always been to train workers for new jobs. In an election year, that reality gets lost.
Trade deficits are only one way of looking at global finance. An expert, speaking about Mr. Trump, said his trade policy is “a scam.”
Source: The New York Times July 23, 2016