It’s not your wage anymore that’s the main reason you’re losing your job in places like Macomb or Trumbull counties in Michigan and Ohio as GM lays off thousands and shifts production overseas. Nope, there’s a new reason. One that’s being referred to increasingly, whether in relation to specific layoff announcements by corporations like GM or whether in relation to the folly of rising tariffs in the China-US trade spat.
Global Supply Chains.
Go to supplychaindive.com and read some of the headlines:
Do you deliver supplies and/or vehicles for GM? You might think about polishing your CV a little. Just saying.
This is a process that is reaching its limits. I don’t mean technological limits. Those are practically endless – even if the rate of technological change seems to be volatile over time. I mean its limits in terms of the value technology adds to society as a whole.
No. I’m not a Luddite. No, I don’t believe more taxes and welters and welters of regulations are the answer. But I do think that a conservative can occasionally do a Buckley and ride athwart at least some small bits of technology crying: “STOP!” Even while using much of said technology.
Here’s Axios on the issue of China and global supply chains:
China has been the world’s biggest exporter for almost two decades and has poured millions into its logistics network so global companies can quickly move goods from factories to cargo ships. China also has one of the best-trained manufacturing workforces in the world.
· U.S. companies can consider moving production from China to Cambodia, Malaysia, Vietnam, or elsewhere — both to dodge tariffs and avoid the threat of intellectual property theft. But elsewhere, they face other disadvantages like dirt roads between factories and ports and inexperienced workers, the New York Times reports .
· And China has levers to make sure it isn’t frozen out of global supply chains, Lewis says. For example, it could threaten to take away a foreign company’s access to its massive market.
China started practically from scratch back in the 80s and 90s when it began building the infrastructure as well as the logistical systems necessary to create what is now the world’s second-largest economy. And that is an achievement that few could have predicted in terms of the speed and scope of the change China underwent.
But when you combine that infrastructure and logistics with a socialist-run authoritarian regime, you get what could politely be called immoral suasion or, more bluntly, threats and blackmail.
Is President Trump guilty of similar threat-making? Yes, but not on the same level.
Trump tweets as tough as any, but even as President of America, he’s circumscribed by the courts and by Congress and, yes, by the endless rules and regulations that both America’s administrative state and the global administrative state (the WTO, the UN, the WHO, and the EU to name a few of the more obvious examples) wield over both corporations and governments.
China is Less So
It is precisely the enormous concentration of power in President Xi’s hands that allows him to be transactional in a way Trump can never be. He will not tweet his threats. He will act on them. And Xi will act in accordance with a longer-term plan. Yes, President Trump can and does act on his promises – or at least on far more of them than anyone expected. But it’s, unfortunately, often a circus driven by hostile media buzz.
So, what kind of transactions could Trump and Xi reasonably agree on at the G20 in Buenos Aires?
What kind of change in behavior could President Trump reasonably demand from President Xi’s regime that would allow both countries to save face and pull back from the trade skirmishes that have been escalating recently?
Unfortunately, any deal will be about supply chain jobs and manufacturing plants. Maybe they can reach a deal. But it should be about China’s involvement with things like the theft of intellectual property, the bending of the rules of the WTO, State-Owned Enterprises, and off-the-books debt.
It should also be about demanding a little civics and civility in China’s inexorable thrust to create its region of hegemony in East, South, and Central Asia, as well as in Africa, the Middle East, and Latin America.
Because with China, you don’t ride athwart technology and cry: STOP!
You stand quietly and bravely in front of a tank.
And hope they don’t kill you.
And even that doesn’t work sometimes. So, Trump has a tough dinner with Xi ahead this Saturday in muggy Buenos Aires. He’ll need a little luck and a lot of skill. Let’s hope he has both.