The United States and much of Europe have painted themselves into a corner.
So many manufacturing jobs have left the US and Europe for Asian countries that it is becoming more and more difficult to find anything that is made domestically.
The average monthly wage of a Chinese manufacturing employee is 3% that of a similar employee in the US……..is it any wonder corporations, struggling to compete on a global level …….are outsourcing more and more of whatwere good, solid jobs…the backbone of the economy?
Donald Trump, who once said that China thinks we’re stupid SOBs……suggested the US should place a 25% tariff on all Chinese products entering the country.
Trump feels that would escalate the cost of Chinese goods here in the US to the point that corporations would bring those manufacturing jobs back home.
The problem with that idea is, 25% is not nearly enough. With China’s
artificially devalued currency and their incredibly low average wage, it might take a tariff of 100 or 200% to dissuade American and European consumers from buying Chinese products…and what you would end up with is not jobs coming back, but unbelievably high inflation as prices of everything would skyrocket.
Many economists have suggested a weaker U.S dollar will boost domestic
manufacturing production, which in turn will lift employment and stimulate…. economic growth.
BUT, a weaker U.S dollar will turn European exports priced in euros more expensive, also tourism in European countries will slow dramatically.
In either scenario, the only winner…is China, who, by the way, holds a
staggering amount of US debt.
In 1986, the total US debt was 2 trillion dollars….we’ve added that much debt and more, during the Obama administration alone.
Want to be sure your kids have an advantage in the world when they grow up? Make sure they learn Chinese as a second language, they may well need it.