Changing conditions in China may lead to more U.S. jobs
Among various other projects, A & E Custom Manufacturing makes sheet-metal components for the New York City subway system. The company also used to make parts for a popular commercial cooking appliance.
Several years ago, though, the cooking appliance customer moved production to China in order to save money. But there was a problem for the appliance maker-- quality and delivery problems in China that couldn’t be resolved. Eventually the company brought their business back to A & E.
As David Conrads reports in the Christian Science Monitor, work is coming back to the U.S. from China. This is due to the superior quality controls used by U.S. manufacturers as well as a number of cost increases in China:
Call it reshoring, backshoring, or onshoring: Twenty years after a flood of American manufacturers began moving to China to cut costs, a growing number of them are trickling back to the United States to improve quality and reduce delays. Many of the high labor-content products, like shoes, textiles and most clothing are probably gone forever. But in an unexpected and beneficial twist for the US economy, manufacturing, much of it high-skilled, is returning from abroad, primarily China. Some analysts go so far as to call it a renaissance in US manufacturing that will create high-paying jobs and provide crucial economic support for local communities across the country.
Conrads quotes A & E owner Steve Hasty, who confirms that he is regaining business:
“We’re doing the work we used to do,” says . “We’re become more competitive in what we’re doing and the type of equipment that we’re using.”
Whether this reshoring phenomenon will continue is unclear. But as Alliance for American Manufacturing (AAM) Executive Director Scott Paul explained in a recent op-ed, there are several key steps that Washington can take to encourage a U.S. manufacturing renaissance:
1. The House of Representatives should pass bipartisan legislation to deter China's currency manipulation. The only thing standing between business-as-usual and a real shot across the bow to Beijing is House Speaker John Boehner. Half of his caucus supports the bill, along with an overwhelming number of Democrats. Currency legislation was one of the few items passed by the Senate last year that overcame a threatened filibuster.
2. The Obama Administration should declare that reducing our $295 billion trade deficit with China involves not only increasing exports but also decreasing imports. If reshoring is ever to become a real trend, we must reduce the flood of imports coming in from China.
3. The Obama Administration should file a slew of trade cases at the World Trade Organization (WTO), and should self-initiate cases domestically to provide relief for battered industries such as clean energy and auto parts, as well as to establish just how little Beijing has done to honor its end of the bargain.
4. The Obama Administration (and various states) should bar procurement from China until Beijing provides 100 percent reciprocity based on the value of these government contracts. There should be no settling for empty promises or a signed agreement that is unenforceable.
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