Do you look for US-made or something not made in China? It’s harder than you think because the labels don’t tell you what you need to know.
Are iPhones made in China or the US? Tesla? And where are things stamped “Made in Mexico” really from? With parts made where?
US trade with non-Chinese countries is soaring. Our trade deficit with the tri Mexico, Taiwan, and Vietnam passed China.
And our trade deficit with China is shrinking a bit as shown in the next chart.
US Balance of Trade
If you wish to give Trump credit for reducing the trade deficit with China from $375 billion to $308 billion, then also give him credit for increasing the deficit with Mexico, Taiwan, and Vietnam from $124 billion to $211 billion.
Trade is Not Bilateral
The problem with thinking we are making any headway at all reducing our trade deficit with China is that trade is not bilateral.
Items stamped “made in Mexico” or Vietnam or many other places have parts and materials made in China.
To avoid US tariffs, China sends parts and materials to other countries. As long as no more than 49 percent comes from China, it can be stamped “Not Made in China” satisfying those who want something else. This is further subject to the added benefit attributed to assembly of parts made in China but assembled elsewhere.
Rubbish From China?
I’m convinced Atomic Economics is correct.
Rare Earth Minerals
China is responsible for producing or refining up to 90 percent of rare earth minerals. They go in nearly everything important that you buy.
If you want something totally not made in China and with no materials produced or refined in China, good luck finding it.
Chinese Companies Dominate the Market
EV image from SNE Research via the Wall Street Journal
Big 3 Intra-Battle Over Batteries
The Wall Street Journal reports a Ford vs. GM Feud Could Shape the Future of EVs in America.
Ford hoped to get ahead by licensing technology from China’s Contemporary Amperex Technology Co. Ltd., known as CATL, to make lithium-iron-phosphate batteries at an industrial scale in the U.S. for the first time. They are much cheaper than other alternatives, reducing the production cost of the car.
Foreign Entity of Concern
In a battle between GM and Ford, $7,500 in tax credits are at stake depending on Biden’s definition of “foreign entity of concern.” The exclusion aims to reduce US reliance on Chinese batteries and materials to make them.
I discussed this on September 30, in An Epic Battle: Ford to Use China’s Battery Technology, GM Wants it Blocked
What does “Made in America” even mean if we are licensing technology from China to make the most critical component of an EV.
Not only will Ford pay royalties to China for the battery technology, a strict definition of “foreign entity of concern” should apply to both GM and Ford over the minerals needed.
It takes 10 years to get a mine up and running. Factor in delays caused by clean energy NIMBY hypocrite who demand clean energy but will fight new mines every step of the way.
Germany Faces the Green Fiscal Truth but Biden Still Clings to EV Fantasy
Meanwhile, please note Germany Faces the Green Fiscal Truth but Biden Still Clings to EV Fantasy
Biden has increased US dependence on China.
Atomic Economics is just wildly wrong.
At present Apple *has* to do most of its manufacturing in China because no other country possesses the infrastructure, industrial ecosystems and overall expertise needed to produce their products at scale.
At the present time – you build it in China or you do not build it. It would take a very long time for that to change.
This (link below) remains the only sensible proposal (warning: not a brief read) I’ve read to re-industrialize the USA. And please note re-industrialization of the USA would absolutely require greater short- and medium-term dependency on China.
https://dc.claremont.org/wp-content/uploads/2023/03/Provocations-5-Goldman.pdf
So you want to de-couple and re-industrialize? You can do at most one of these things.
I’m 78, I remember when there were no quality Japanese imported cars on the market. US producers made rust buckets that would break down regularly and got maybe 10 miles to the gallon. In the eighties, Honda and Toyota sold us quality cars that got great mileage. I’m all for trade, no more protected markets that screw the consumer. Unions are death to manufacturing period.
Most generic medications are made in China or India. They are distributed by an American company listed on the label. Because the FDA has continually sited Indian manufactures for cleanliness and accuracy violations, some Indian pharmas no longer exports meds to America, leaving China as the sole exporter.
I gave that up a long time ago, we drove manufacturing out of the USA and it’s been downhill ever since…
=The market dictates the price of a product, not it’s location of production.
some kind of amr-chair ivory tower BS! person who posted this never run lemonade stand!
———-
each piece of stuff has cost of producing!
cost of producing consists of :
cost of labor
cost of raw materials
cost of producing (gov , taxes, enviroment, etc)
summing up all above gives price!
——–
china has 1.5 bln people, most of them are willing work for 20$ per day. you wont find person in USA who wants work for 20$ per hour!!!
China is at good terms w/ Russia, biggest source-producer of raw materials, thus cost from oil to anything is minimised!
and on on on !
thus China is biggest-cheapest producer in world!
alx
ps
now make compar. analysis why India is not biggest-cheapest producer in world!!
Why would you want to buy something “not made in China”? Racism? Discrimination? Or simply envy of Chinese success?
Buy your favorite pre-owned USA made article of clothing from EBay and marvel at the style, materials, and workmanship!
China is not my enemy. I am not saying they are angels but I am saying that the USA is the worst human rights violator in the world. We just have the best PR in the world. We do all of our violations offshore. China has slaved out an entire generation to provide good quality, low cost goods for me. They send over real goods and I pay with fake paper currency which my government printed from thin air. That is a great deal, thank you China. I have also been to China and other countries in the far east on work travel. The people there have always been nice to me. Governments are governments, they are not the people.
Doesn’t China print their own currency?
Sorry, You can’t differentiate between reserve currency and ordinary.
So nice to be able to buy finest quality, affordable Chinese product. If not for these I could have no nice things. arrgh.
First lithium extraction plant opens in Germany
Vulcan opens its Lithium Extraction Optimisation Plant (LEOP) in Landau, Germany – IO (innovationorigins.com)
It’s INDIVIDUALS, not governments, who should be deciding whether China (actually, Chinese COMPANIES) is some kind of “enemy” or not.
I have nothing to say on this topic so I will say nothing.
My only quibble with Atomic Economics post is this line
“Apple produces in China, not because it needs to; but because it can.”
Since the market dictates the price, that indirectly dictates where something must be produced. You wouldn’t attempt to build greenhouses in Greenland to grow oranges because the cost of the product (Oranges) wouldn’t be viable compared to growing them in Florida or California. So Apple builds in China because the price of the iPhone dictates that it must because labor here is too expensive (eventually it will be too expensive in China too and then it will move on to the next cheap country).
“..Apple builds in China because the price of the iPhone dictates that it must because labor here is too expensive..”
Nope.
Production labor there is just as expensive. American workers’ net; after fundamental taxes, mandates and expenses (rent, health care, food…); take home is rather low these days, compared to almost anywhere. Certainly compared to most of East Asia.
Instead, what makes producing in America so expensive and uncompetitive, is the usual financialized dystopia costs of keeping net-negative leeching classes in splendor: Rent, “insurance”, mandates, lobbying, kangaroo court shakedowns, taxes going towards constructing bomb craters and child corpses around the world etc. Actual workers can mostly only dream of living as well as their East Asian peers.
US imported high value pcs from mexico (green). In recession Imports from China, Mexico, Taiwan and Vietnam will deflate. It will improve the GDP and strengthen the dollar. The magnificent 7 are 20 miles south of Lebanon. QQQ [1M] DM flipped lower
in Oct 2023. There are 3TD until Nov 30. At this point NQ [1M] is a trigger : the current
closed is under July high, but QQQ is above July close and high. Nov [1M] DM flipped up, b/c investors parked their money in AAPL, NVDA, MSFT, GOOGL…and TSLA.
Mish, you and a lot of folks here are a lot smarter than me, so I apologize if I dumb down the conversation, but a few things that concern me:
While I get and agree what you are saying from an economic point of view, aren’t there certain things that a host country should be able to make on their own if not just for national security purposes? Doesn’t China in fact do this with certain industries?
Steel? Jet Parts?( maybe thats a good thing with our out of control neocons?)
I am a little concerned when 90% of our anti biotics come are outsouced and i think 80% of that is China & India(I think we have better relations) the other 10
Does this not matter anymore?
It only matters if you truly believe the other side (country or person) is inherently evil and means to do you harm. Certainly the MSM and other government people would have you believe that, but it is in fact true?
The big 3 things needed for national security are food, energy and military weapons. The US is self sufficient in 2 of those and very close in energy.
Remember, China and India may make our antibiotics, but we produce their food (and are indirectly responsible for some of their energy via our navy safeguarding oil routes). If they decided to shut down antibiotics, we could easily stop sending food and energy. Who do you think would blink first?
Thank you for the response. Great points.
On the energy side, yes, I believe they want to do us harm…
We need to be making our own pharma or source it from friendly nations.
This is a major national security threat and needs to be corrected ASAP.
Instead, we’re hyper focused on climate change and DEI.
I would sincerely hope a GOP president would make this a day 1 initiative.
FJB!
“We need to be making our own pharma or source it from friendly nations.”
The “friendliest” “nation”, is the one which charges you the least for what you need and want.
Conversely, it is the UNfriendly ones which; as opposed to focusing on giving you a good deal; instead focuses on silly fearmongering campaigns aimed at nothing more than banning you from availing yourself of cheaper and better options
Rubish! When China blockades Tiawan or worse, the first thing they’ll do is cut off our supply of pharma. Not good. Your logic held up until about 3 years ago. That’s when FJB! got into office and the Chinese are now a global superpower. There’s a reason for onshoring nowadays.
BS!!!!!
So….If I read you right: Everything was hunky dory between China and Taiwan. Until one day three years ago, some senile guy fell down a flight of stairs and; not unlikely unbeknownst to himself; landed in the White House. Where he is still fumbling around, doing his best looking for an exit?
“Do you look for US-made or something not made in China? It’s harder than you think because the labels don’t tell you what you need to know.” // That’s why I lonnng ago ceased caring about the topic. I need X, I buy X and go my way. 🔦✝️
It is reported that China is undermining the Eurodollar system by loaning dollars to nations stuck with dollar debts and getting payback in yuan or other arrangements. This could be huge, if true. Supposedly, they saved Russia this way from US engineered default.
Its true. China doesn’t want to hold the paper it can’t use.
The market dictates prices only in a free market. China undercuts US competitors bc it steals R&D, doesn’t have labor laws or environmental regulations to abide by, and gets government subsidies. So don’t claim the market is setting the prices. You’re living in a fantasy Adam Smith land.
I understand that – You on the other hand live in a fantasyland where it’s better to pay more to get less and we need tariffs to ensure that.
China is benefiting US consumers at Chinese expense. Did I not say that?
Can you read?
All those who no longer have their “R&D” because the mean Chinaman “stole it from them” should raise their hands…..
China is a communist country. You think they “DON’t” have enough laws?And “labor” ones to boot? If America actually does manage to have even more of them by now, than a bloody “workers party” communist outfit, that would surely be America shooting itself in the foot by outdoing even commies in piling on freedom restrictions.
How would you even begin to measure, which is a prerequisite to being able to rank, exactly who has the “most” “environmental regulations? China has nasty regulations making it effectively much harder to not take public transport. Which in China is so prevalent and efficient that emissions are very, very low compared to in the US. Ditto regulations effectively making housing units much lower in energy consumption. What “regulations” specifically does the US have which makes up for that? Not saying the US may not have any; but unless you have very in depth knowledge of exactly what regulations end up affecting what emissions, all you’re doing is regurgitating mindless drivel you know nothing about.
Overwhelmingly, far and away the main reason why China is undercutting the US, is because the share of total income over there which goes to people producing stuff, is MUCH higher. American productive workers and organisations have to drag along many times more deadweights who live of rent, “insurance”, mandates, kangaroo court nonsense, “investments”, “asset appreciation” etc.; NONE of which produces anything; compared to their Chinese counterparts. Americans also have to pay attention to these leeches. Taking away from their opportunities to optimise for economic efficiency, since they instead have to concern themselves with ambulance chasers shaking them down over “Metoo” nonsense, as well as Hedge Fund nobodies requiring ever greater transfers to live in splendor in exchange for doing nothing neither interesting nor insightful nor of any value. Instead living large solely off of Fed welfare payments transferred from productive Americans hence adding to those’s cost. Etc.,etc.
Pretty much goes for the degenerate stooges in the federal government, too.
I focus more on companies that don’t virtue signal since buying exclusively American is next to impossible outside of a handful of products.
During pride month I needed new sneakers but almost every company wanted to showcase Pride month instead of their products. I eventually found a company called TYR.
They claim their shoes are made in the US. No way to prove it but I did like there was no mention of Pride month on their website. SOLD. I bought two pair and loves the shoes.
Telic makes a limited selection of shoes in Utah. American made and I am still wearing a pair of flip flops I bought 5 years ago. A bit higher than Wally World or Amazon though.
Found a U.S.A. gift: “Piece o’ Wood” by SpankyTron…oh, wait…the wood’s from Canada. 😉
I do try to buy a few items each year from a Made in USA source. Here is a site I sign up for and get regular marketing emails from.
https://www.madeinusaproduct.com/
Everything I’ve bought through this site has been very good quality and while a little bit more expensive not as much as I expected. There are a couple more sites similar if you Google it.
I have no connection to site so I’m not promoting it for profit. I try to at least price a purchase through one of Made in USA sources if I have time to consider the purchase.