When a president is elected, I would understand the impulse to do what Donald Trump has tried to do to his predecessor's legacy.
I implore our future officials to consider the adage that even a broken clock is right twice a day. The man did manage, implausibly and outrageously, to follow his instincts into the White House. Those instincts — or his advisers, or maybe even his xenophobia — have pushed the United States into a necessary trade confrontation with a country that we have poured money into over the last 30 years to the benefit largely of the Walton family, Chinese industrialists (and workers) and the Chinese government — at the expense of our own middle class.
We must not continue to cede our manufacturing base to China under the delusion that a global free market exists.
I moved to the United States in 2011 and founded Detroit Bikes, the country's largest bicycle frame manufacturing facility. The company has recently taken on large assembly and sourcing orders for a national retailer and hiring has started on up to 50 new positions in the 48227 ZIP code, with the potential for many more to follow.
The 301 tariffs have played a significant role in winning us these orders.
If managed correctly, tariffs could lead many other purchasing departments of many other types of products to rethink their supply chain and how American hands can start playing a bigger role in it.
Strategic tariff management has the potential to create hundreds of thousands of new American jobs.
As it stands, the knock on the 301 tariffs is that they are exclusively punitive to China, rather than constructive in the United States. Large American purchasers (Walmart, etc) can avoid the tariffs by sourcing, and in turn driving the construction of new factories and the jobs they house, from some other country — say, Vietnam or Cambodia. In this scenario, the 301 tariffs exist only to either tax Americans, or to continue our national transfer of wealth to replacement countries. They function as a consumption tax that disproportionately impacts people with less money to begin with.
But these tariffs have also opened up some opportunities, and could open even more. In my industry, most bikes are assembled, boxed and shipped from China, and only opened once they reach their final retail destination. In higher-end bikes the most expensive component, the drivetrain, is usually made in Taiwan or Japan.
If those components are shipped to China and assembled onto a bike, they then become subject to the 30 percent 301 tariff coming into the U.S. Suddenly it makes a lot of sense to pay an American to assemble the globally sourced parts that make a bicycle, rather than having it all assembled in and shipped from China.
Twenty-five years ago, there were thousands of American bicycle production jobs. Entire communities were sustained by domestic bicycle manufacturing and assembly facilities and the good, steady work required to run them. American consumers were exposed to a broader product array, better quality products and a local economy that kept consumer dollars in the hands of local people.
Somewhere along the way, we passively allowed China and a handful of American oligarchs to strategically undo the manufacturing framework of our country.
While the American government sat back, European regulators demonstrated that China subsidized its steel industry and reacted by applying tariffs to protect European steel makers. It wasn't just steel — the European Union has been consistent and diligent in countering Chinese market manipulation.
As it relates to my own industry, there are currently many thousands of bicycle industry jobs that remain in Europe. We can, and should, follow this same strategy here in America.
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December 01, 2019 at 12:01PM
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Here are some jobs that tariffs helped create in America - Crain's Detroit Business
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