My answer to Why do so many American clothing companies manufacture their apparel overseas? Why not manufacture the…
Answer by Desmond Last:
To reduce cost and increase profit and because the whole world has been conned by something called a ‘level playing field’.
The irony is that the same people who they are providing a share divided to, the pension funds, are the same people who will be laid off from work as manufacturing shifts overseas.
Economic deregulation was a gift to Governments who had no new ideas, a stagnant domestic economy and a lack of foreign capital to use.
The financial sector rubbed their hands and the excess of Wall Street was born.
Paul Keating the once Australian Prime, must walk around now in a false beard and a wig. He said that Australia would become a Banana republic if it did not deregulate – now it is about to close down the last of its car manufacturing in Melbourne.
It is true that tariffs protect inefficient industries , increased costs and removes competition. But the problem was a country such as Australia was suddenly competing with China and before that Japan, South Korea, and Taiwan. Each new global entrant bringing with it a further round of price competition, technology innovation and the consequent loss of home manufacturing.
America’s clothing manufactures were suddenly facing a flood of cheap imports, alternatives to American cotton and competition in all its markets. It has not helped America that the ‘only game in town’ that they have ensured has development money and the eye of research has been military spending.
As I have said before you cannot multiply the value of the missile – it does not need spare parts, it cannot be traded against a new one and America ends up paying for the damage it causes.
Of course nothing beats ‘Bend over Britain’ This is a country on which the sun supposedly never sets on the Empire – do Cameron and Hammond really think they can abuse the rights of a world famous writer and still be taken seriously?
A country where Prince William took a day off from doing nothing to show the Chinese Prime Minister a London Taxi and an Aston Martin – they will be both be made in China one day.
The U.K once the economic engine of the World reduced to assembly not car manufacturing. The workers wage serfs of whichever Economic cartel is next to bend them over.
But for the U.K to standby and watch as the Indian owned U.K Steel Industry is swamped by Cheap Chinese climate change inducing Steel whilst America puts on 500 per cent tariffs – and the UK Gov bleats that it is up to the EU, is unbelievable. Who gives a toss what the EU says – it is the UK Steelworker who is going to be out of work not the Chinese.
Sorry I wandered off but I was illustrating the fact that it is not just clothing that has been globalized but all manufactured products.
Levis Jeans, apart from some high-end product are all made overseas. It is unable to make a profit unless it uses low-cost labour. The owners need a return on their investments. But how is it that America does not buy its missiles from China – after all they are cheaper. A small amount of people make a lot of money from the $650 Billion annual US military spend and they have keys to Capitol Hill.
Why do American buy Levis? If America were to boycott Levis would it move back to the U.S.? No.
How then is it that America is able to support $650 billion a year of military spending whilst its citizens who used to make Levis can only afford second-hand Levis?
Because America is so busy protecting the markets that Levis sell to with the dead Marines it brings back in body bags it has no money to lend to industry so that it has state of the art manufacturing. It has few Universities that support textiles and clothing manufacturing. It has Universty assembly lines of solicitors and Artificial Intel. It needs a sales tax that is increased for imports and a Corporation tax that favours US manufacturing.
The introduction of a comparative advantage offset would make a huge difference but that would need a new way of looking at the real cost of export and import to include taking into accout into account climate change – but that would mean John Kerry and Obama would have to have original thought – a trait I have yet to witness.
The foreign tax credit exemption in America corporate tax law is also a plus for overseas manufacturing.
If you want a strong export market you must support it with $ not cheap Labour Free Trade Agreements.
America must ask Obama if he has found the $45 million he paid for a $500,000 gas station in Afghanistan which was not available to invest in American manufacturing.
Wake-up America are you going to keep funding a Peace that does not work to the detriment of your Clothing and other manufacturers?