Monday, August 6, 2012

Buying American

    An associate of mine sent me a relatively long article concerning promoting purchase of American produced consumer goods as a means of increasing US jobs. His summary was, "We can significantly increase USA jobs and decrease our trade deficit with China by simply making the effort (and sometimes slight additional expense) to choose to buy products made in the USA instead of those made in China."

    I replied as follows:
    "I heartily agree.
    However, we should not look at this as a boycott. A boycott is generally intended to punish or pressure a supplier to bring him to your point of view by reducing his sales revenue and profit.
    In the case of Chinese produced goods, the Chinese are not arbitrarily supplying goods at low price. The fact is that their production costs are low, primarily because of low labor costs.
    Your program to "Buy American" would be an intention to keep American manufacturers in business which would supply American jobs. For that, you would be paying a premium for American goods.
    This would be your counteraction to a US government program to bring in low-cost Chinese goods to the disadvantage of American manufacturers by use of its free-trade policy. That government program is consistent with its obvious desire to redistribute wealth on a global basis to the disadvantage of American citizens. The claim of justification is for the obvious low prices of Chinese goods, but as you point there is coincident loss of American jobs.
    The first responsibility of the US government should be to its citizens, but it apparently doesn't see it that way. Your "By American" program will be helpful to the US economy, but we need a basic change in government policy, which would lead to elimination of free trade."

4 comments:

  1. Yes I agree. This is not a boycott. Just customers exercising choice to the benefit of themselves, neighbors, and country. I just did not have time to rewrite the whole thing.

    And that is only a short-term “solution”.
    The real solution is that we need to improve our game and become more competitive.

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  2. There is an additional complication- determining what is "American". I just bought some electronic equipment from an American company. The device says it is designed in the United States, and manufactured in China. "American" automobiles present even more complex issues. Their component parts are often manufactured in several different countries before they are assembled in the United States, or some other country.

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  3. True, but we are interested mostly in manufacturing jobs. Product designed in the US but manufactured in China should be avoided. With respect to automobiles, the least number of parts manufactured abroad, the better for the US.

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  4. Don’t overthink this or make it overly complicated.
    When it is obvious and you have a reasonable choice, just try to buy American – the higher % American the product is the better (for our purposes).

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