One major hurdle to restart U.S. industry is that the machinery needed to set up many different production lines is not available. It must be imported, much of it from China. Everything from furniture manufacturing, to packaging materials, to producing nuts and bolts has been dependent on foreign-produced machines. Bloomberg this week reviews dependence on China.
In recent months, U.S. businesses have filed hundreds of requests, made to the U.S. Trade Representative, for exemptions on China tariffs in order to get such machinery. One example is Tesla, Inc., which has filed multiple requests, arguing that they are needed to restart manufacturing in the U.S. Such a piecemeal approach is unlikely to survive the deluge of a trade war. Rather, the U.S. might join the long line of countries benefitting from China’s “Belt and Road Initiative” to industrialize other countries.
Johan “Kip” Eideberg, Senior Vice President for the Association of Equipment Manufacturers is quoted, “While we certainly agree we should aggressively pursue any policy that helps us make things in America, the idea that you can move every part of the manufacturing process back to the U.S. does not align with reality.” His group represents makers of equipment used in construction, agriculture, mining, utilities and forest products. Jay Timmons, president of the National Association of Manufacturers said in a statement that the tariffs, “threaten investment, jobs, supply chains and, in turn, America’s ability to outcompete other nations.”
What gets lost in the discussion is that no serious national drive for industrialization can avoid dealing with unstable supply lines, inadequate and/or outmoded transportation and electrical infrastructure, and an adequately educated and skilled workforce.
