Jobs Wash Away in Trade War

By Gus Tyler

Published August 15, 2003, issue of August 15, 2003.
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The common expression “He’s his own worst enemy” is usually applied to individuals. But it can also be applied to nations that pursue self-destructive policies.

The current circumstance that serves as a perfect case is a “war” between the United States and China over their respective share of the American market. It is a war that China is winning. We are being overwhelmed by the rising tide of products “Made in China.” In 1990 our imports from China were about $10 billion; in 2002 our imports from China were more than $200 billion.

Which would have been okay if our exports to China had also risen at the same rate. But, during the same time period, American exports to China were almost stationary — a miserable and meager $10 billion increase.

The most immediate impact of the flood of goods from China has been to wash away millions of jobs in the United States. One of the first American industries to be hit has been the apparel trade, which, in the immediate postwar years, was the single largest employer in American manufacture, accounting for one out of every eight workers. Today the industry is the latest “vanishing American.”

The obvious question: What does China have that we do not that enables that country to beat us out in our very own market? The answer in two words: cheap labor. Otherwise the technology, management skills and marketing ability are the same for the operation in China as they are in the United States. The reason is simple: The Chinese operation is owned and run, either directly or indirectly, by American corporations who are shutting down production here to do their production over there.

China is not the only country where this transfer of jobs from the United States to foreign soil takes place. But it is the largest exporter to the United States.

It is also the country that, within the past two weeks, has been getting special attention by an American industry that has heavy political clout. We refer to the textile industry. For many years, the giant textile corporations, located primarily in the South, resisted the movement of production overseas. The reason is historic. The owners of the textile mills in Dixie were more than textile producers. They were the descendants of the onetime plantation aristocracy. In the towns where their plants were — and still are — located, the mill owner was the landlord; he owned the general store; he was the backbone of the bank he owned the barbershop, and the gas station. He was, in a sense, the equivalent of a feudal lord who looked upon the town as his domain. If his textile plant was moved overseas, his renters, his retail customers, his bank patrons would all vanish.

But, other textile manufacturers did go overseas, and with the cheap labor they had were able to undersell the textile producers in Dixie.

As a consequence, these textile overlords, together with representatives from whatever apparel factories remain in the United States, met with Southern members of Congress to demand that a limit be placed on Chinese imports.

Uncle Sam’s predicament is a perfect case of a guy who, at the moment, in the matter of trade, is his “own worst enemy.”

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