Trade and tariffs. These days it’s hard to go five minutes on the news without hearing something about trade and tariffs. It always seems to happen when economics becomes a part of popular discussion, there’s a whole lot of noise that gets in the way.
For some of us, it’s a turn off. We dismiss the whole debate out of hand. For others of us, it’s Kool-Aid time. We assume that it’ll solve all our issues overnight. So let me take you to the middle ground and make the case for why businesses need to be ahead of the curve and act now.
First, we need to acknowledge that things are broken. By outsourcing so much of our business overseas, we have left ourselves vulnerable. We are at the mercy of geopolitics, and our place at the end of the supply chain means the ground we’re standing on is far from firm.
Our loss is our suppliers’ gain. The countries to which we are sending our dollars have benefitted off of us. In most cases their governments have subsidized the very companies themselves. As playing fields go, it is a long way from being level.
This branch of global trade risks undermining us geopolitically as well as economically. All too often we hear of human rights abuses in factories that produce our clothes and our tech, yet our leaders turn a blind eye. If we want the world to embrace the type of freedom that we enjoy, we cannot be seen to be profiting off of regimes where those freedoms are so easily discarded. Hypocrisy never looks good on someone claiming to champion democracy.
So, what’s to be done?
Buy American. That’s what we’re told. For a consumer it appears to be the most logical choice, but it’s not as simple as it appears. Too many of our iconic brands are either manufactured overseas or owned by entities beyond our borders. Buy American is little more than a cheap slogan that political leaders use in the hope that we’re too dumb or too distracted to look at the issue in any depth.
Yet for business owners who are fully US owned and operated, Buy American can represent an opportunity. Those who are the real deal should make noise about it, showing their customers that their dollars are well spent with them, and this is a good lesson and US made products.
And for those businesses who are still reliant on overseas connections, what better time to be reshoring? The smart money says it’s far wiser to reshore out of choice and be ahead of the curve than to wait until that decision is forced upon you and you must move with the herd.
But let’s be honest for a moment, this all sounds good but there’s a reason why so many companies rely on overseas suppliers. Even though we have ten million people unemployed, we have no labor market. Ten million people receiving benefits makes the government the single largest employer in the country, yet it is failing to utilize this colossal workforce in any meaningful way.
Even if a massive hike in tariffs and taxes rendered overseas trade redundant, we would still be unable to sustain ourselves. We need a massive retraining program to get the best out of our workforce. Anything else is just lazy.
But the work is worth it. The juice is worth the squeeze. We would regain our sense of stability in an uncertain and constantly changing world. We could reduce the threat of economic turbulence by holding onto our dollars. We could take meaningful steps toward a more secure and dependable future.
I’m not naive. The era of cheap labor and global supply is here to stay, but I believe there’s a way forward that can benefit us in many ways. If we were able to pour the right level of investment into developing our southern hemisphere all of the countries in Central and South America to a manufacturing base, including the logistics in transporting goods, built a high speed rail network for freight that ran from Canada down through Central and into South America, we could protect our own manufacturing industry from supply disruption, reduce costs, protect our intellectual property, reduce the environmental impact of trade and go a long way to mitigating the factors that propel so many illegal migrants north.
Let’s press our leaders to do all they can when it comes to smart reshoring like this. Let’s see our manufacturing brought back from across the Pacific and commit to building up the manufacturing industry both at home and to the south. Let’s build for a future where our security and safety will be far more assured.
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