Support American Companies. Buy Made In China

Thursday, February 26, 2009 1:28
Posted in category Uncategorized

Over the course of the last few weeks, I have been trying to construct a coherent article related to the “buy American” clause in the stimulus package, and I have come to essentially one conclusions:

It is essentially an economically racist policy that will American brands who manufacture overseas

… and China will actually, ironically, benefit in the end.

Go back a couple decades to the days were “Buy American, it could be your job prevailed”.  It was the US against Japan, and consumers fought back against the rise of Japanese goods in the only way they knew how, the voted with their pockets, they bough American cars, turned off Sony for a Zenith, and took up Levi 501.

They even went to Wal-Mart, who built their business on “Buy American”.

In the current environment, in a global marketplace,the fact that the current administration would dust this policy off today as if things had not changed is a bit disturbing.  After all many goods that are “American” are really only “American” in name – GE, GM , Whirlpool, or Kodak – but not by origin of goods.

to prove my point, for you IBM/ Dell/ Apple users, flip it over to see what it says.. “Made in X Design in Y” ???  Crack open the casing and look at the commodities and you will see Ireland, India, China, Taiwan, and Mexico.

Yet, it you life the hood on a Toyota in the States, you are likely to learn that their cars actually have higher levels of “MAde in American” points.  Sure, it is Toyota – a Japanese brand – but being made in America by American workers, you are actually buying a product that is more “American” than a the American Brand.

… and taking this one step further, by buying “American”, a kodak camera made in China, while the consumer is supporting an American Brand, they are not supporting American jobs in the way they think they are.  Sure, they are employing logistics professionals and port labor, but it is not the same as what many think it is.

Why all this is important, to me at least, is former Commerce Secretary Gutierrez purposefully blurred definitions of  “Made in China” &  “Made in America” as part of his policy that China was unfairly valuing its RMB to create cheaper goods, and that we are simply going to see more of the same.

That there has yet to be a clear campaign to effectively educate consumers about what is “American”, what is “Chinese”, whta is “American made in China”, what is “Chinese made in America”… and which of those is better than the rest

That, instead of highlighting that Motorola was moving their entire handset manufacturing division to Tianjin, and that they were no longer selling “Made in America”, that the “Chinese” were unfairly selling their goods. By the same token, they were able to sell the theory that “American” firms were not given access to the Chinese market – when in reality Motorola China (registered in China) was doing just fine.

In the end, this is a policy that still looks to play of the fears and ignorance of the market.

Not a policy that address the core issues of the US economic problems

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7 Responses to “Support American Companies. Buy Made In China”

  1. Alex says:

    February 26th, 2009 at 1:38 am

    Robots. Ban robots. Then there will be lots of work for all (apart from building robots, of course).

  2. Shawn in Melbourne says:

    February 26th, 2009 at 4:57 am

    Politicians do not understand supply chains.

  3. David says:

    February 26th, 2009 at 9:04 am

    It’s not just about the supply chain.

    For many products, the lifetime value of the software & services sales far exceeds the value of the one-time hardware purchase. Computers are a very obvious example. Very nice PC’s sell for $500 in the US (including $100+ in OEM-loaded software). In the first 3 years, how much does the average company or consumer spend on software running on that $400 (500-100) box? At least $1000 in games, security, business apps, finance software, music/movie downloads, games, etc. None of these software services would be possible without the box. So, the $400 Chinese-made box enables $1000 in software sales. Nevermind the license fees on hardware inside the box. Now, how much of the $1000 is ‘made in the USA’? Probably a lot, but not all. The interesting threat to the US is when all the software gets developed offshore. All the sudden, China gets a much larger share of the $1400. So, start checking the credits at the end of those Hollywood movies.

    Same is true for DVD players, medical equipment, etc. Where else does this apply?

    Is food the software for the frig and microwave. Maybe cheap microwaves drive higher purchases of gourmet prepared frozen dinners. Spread over three years, the added value of frozen food probably exceeds the cost of the $100 microwave….

    Just thinking out loud…. nothingis ever as simple as it seems.

    Hope all is well. Cost cutting has kept my travel to a minimum. Hope to be in China sometime soon.


  4. Dan says:

    February 26th, 2009 at 12:45 pm

    It’s not racism. Nationalism, yes. Shortsighted, yes. But racism/race have nothing to do with it.

  5. Rich says:

    February 27th, 2009 at 8:47 am

    @ alex – ban robots insert sheep?

    @ Shawn – agreed, and I would say they do not understand economics either

    @ Daivd – great points, and I would add automobiles and mobile electronics (iPhone included).. and were the Chinese to view the us as a market greater than their own, I believe we would see more code developed in China.

    @ Dan – it plays into the fears and ignorance of people in a way that I think is racist. Toyota offers more “American” in their cars, but this policy promotes GM because IT IS an “American” Brand.


  6. Rich says:

    June 5th, 2009 at 12:50 pm

    Be American Buy American and its not better to buy American foreign(toyota) owned its better to buy American overseas made….. tax base people

  7. Rich says:

    June 8th, 2009 at 3:06 am

    Rich –

    So you are of the opinion that it is better to buy an American brand like GE even though it may manufacture overseas because GE pays taxes in the US?

    What about the tax base created by jobs at the Indiana Toyota plant? Or the fact that GE China does not pay unemployment tax in the US where the Toyota factory would?