Why Is The US War Unwilling To Go Back To The Nest?

US President trump has offered a tariff knife to China, hoping to win back a large number of US companies, but so far he has failed to get what he wants.

According to a recent survey by the China Chamber of Commerce of the United States, about 41% of US companies consider or are moving production sites out of China under the impact of the US China trade war, but most of them focus on Southeast Asia and Mexico. Less than 6% of them choose to return to the US. The main reasons are the following four points: USA Today today:

Lack of complete supply chain

Many enterprises have shown that China has a complete supply chain system to be able to manufacture, but the United States lacks the same network. "It takes at least five to seven years to build capital intensive infrastructure, R & D and training personnel to make use of domestic capacity," said Osgoo, executive director of Klean Kanteen, the famous brand of vacuum flask. But the company does not have enough interest rate and working capital to make up for the loss during this period.

Two, high wages and strong dollar.

According to the Boston consulting company, the wage gap between the United States and China has been shrinking in recent years, but the rate of pay adjustment in the US has exceeded the increase in productivity, which means that the cost of labor in the United States is relatively high. Trading Economics data show that the average monthly salary of American workers is more than 3200 dollars, compared with Vietnam's average of about 237 dollars, Indonesia's 188 dollars, Thailand's 425 dollars, and Mexico's about 400 dollars. In addition, the strong dollar "leads to more expensive export products in the United States".

Three. Policy

The United States provides preferential treatment to Kampuchea, India, Indonesia and Thailand to exempt most countries from importing tariffs. The aim was to help developing countries to develop their economies.

Four, the geographical advantages of neighboring China

Cai Ruide, chairman of the China Chamber of Commerce in the United States, said many American businesses are diversifying their supply chains and reducing their dependence on China. But the US did not intend to throw away the world's second largest economy with 1 billion 300 million people. China is still the largest single market of many businesses.

Katie Tangman, head of outdoor sports brand Columbia, said: "local manufacturing enables us to be competitive in the Chinese market while supporting innovation and research in the United States."

Cai Ruide said that moving factories to Southeast Asia and India is reasonable because it can still touch the Chinese market. "So few American businesses plan to move their businesses back to the United States."