The U.S. a Manufacturing Giant Again?

After reading Tonelson’s letter, it seems that his intended audiences are business owners; the general US public, specifically those who are having trouble finding work; and economic analysts.

Alan Tonelson is a Research Fellow at the U.S. Business & Industrial Council Educational Foundation, a Washington research organization studying U.S. economic, technology, and national security policy. Tonelson received a B.A. in history with highest honors from Princeton University in 1975. He has had many articles in major publications such as The New York Times, The Wall Street Journal, The Washington Times and The Los Angeles Times. He’s appeared on CNN, TalkAmerica, and Global Economic Media. He has testified before the government committees and commissions such as the Senate Commerce Committee. Not to mention the numerous books he has written on foreign trade; he also lectured at many universities all over the U.S., including Columbia University and Harvard University.

Tonelson’s argument on Michelle Dammon Loyalka’s editorial (“Chinese Labor, Cheap No More,” The New York Times on the Web, Op-Ed, Feb. 18) is that just because China is going through some labor changes, it does not ensure that a “meaningful American industrial comeback” is on the way. He argues on Loyalka’s point how “industrial subsidies, trade policies, undervalued currency and lack of enforcement for intellectual property rights” may have increased Chinese labor costs which in turn would increase price and decrease American imports from China, but “American imports of Chinese products have become less than 5 percent more expensive since 2010”. He mentions how predatory trade policies have transitioned China to high value capital manufactures, which pay better than labor-intensive manufacturing thus raising overall Chinese wages, but “their higher productivity typically offsets these pay levels with improved efficiency.” These non-labor considerations helped push the United States merchandise trade deficit with China up by another 8.2 percent; broadening how close the U.S. is to getting back on its own feet.

I think Tonelson has a good point due to the hard facts that he presents. It would be hard to say that the U.S. is soon to be a manufacturing giant again like it was back in the industrial revolution just because China is having some social problems meeting its younger generation wants and needs.

http://www.nytimes.com/2012/02/25/opinion/chinese-labor-costs-and-american-manufacturing.html?ref=opinion