Chinese Companies Are Investing American Manufacturing Plants!

US President-elect Donald Trump and Vice President-elect Mike Pence (L) visit the Carrier air conditioning company December 1, 2016 as part of Trump's focus on manufacturing, which some business experts praise but worry could spark a trade war
AFP/Timothy A. Clary

The global trade winds are blowing in America’s direction again.

Chinese companies are investing in manufacturing plants and expanding operations in the U.S, the Wall Street Journal reports. “Job-creating investment from China is booming,” WSJ columnist Andrew Browne notes.

Several factors are driving the trend. One is a closing wage gap, particularly for skilled workers. Another: industrial land in the U.S. can be cheaper than in the coastal cities of China from which manufacturers can easily ship their product. Lower U.S. energy costs are also playing a role, Browne writes.

The biggest factor, according to Browne, is advanced manufacturing technology–which could curb some of the job-creating power of China’s investments in the U.S. Browne calls Trump’s promise to bring about a manufacturing jobs renaissance “pure fantasy.”

Don’t be so sure. Taken alone, the factors that Browne notices might not be enough to massively revive jobs making and building things in America. But they won’t be “taken alone.” The Trump administrations budget, for example, calls for large cuts to the Environmental Protection Agency–specifically telling the agency to quit funding the implementation of a massive expansion of the administrative state that would have raised energy costs for American consumers and businesses.

At the same time, taxes on imports could push the move from “Made in China” to “Made in the U.S.A.” along even further, as the Wall Street Journal itself noted in an earlier article.

“A hefty U.S. import tax on goods produced in China could accelerate a trend already underway: Chinese companies setting up factories and expanding in the U.S.,” WSJ’s Nina Trenmann wrote in February.

Far from creating the conditions for a trade war, it appears that President Donald Trump’s tough talk on trade is bringing around an end to the quiet trade war waged against American workers for the last two decades. Peace–and jobs–in our time is a real possibility.


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