Trump says the higher tariffs go, the more companies that will move back, but Trump is wrong. They WILL NOT return. Here’s why…
Tariffs on Mexico are going to bring back manufacturing?
No, the tariffs will not do that.
The manufacturing and those jobs are NOT coming back.
Let me explain.
I did an internship a few years back at this manufacturing facility in El Paso, Texas.
I was studying computer science at an over-priced yet sub-standard private vocational technical college, though there is nothing wrong with vocational technical colleges, quite the contrary, for I just say “over-priced”, because, well, $40,000+ for a two year program (which is not room & board either) doesn’t sound like a good deal to me, and I say “sub-standard” because, well, you know, “no child left behind”, however, part of my experience at the school was an internship near the end of the program.
I won’t mention the company name I did the internship with, but let’s just say it is a top-notch, world-renowned wire-harness designer and fabricator.
When you think of super fancy, high-tech wiring harnesses in cars, airplanes, and a stuff like that, this is the type of design and manufacturing I am talking about.
Here’s the thing – If memory serves me correctly, the company is a German company, headquartered in Germany.
Where my memory may be failing is that it actually may be a Swiss company headquartered in Switzerland.
Ironically, my bad memory makes a good point – this company has coverage around the globe, with facilities in Asia, South America, and of course, North America.
Now we are getting to my point of this article.
Well, because again, the vast majority of people who believe this Trump Tweet are being duped:
Companies will not be moving back into the USA, and, by extension, the jobs are not coming back either.
I’d like to continue with my internship example to drill my point home.
The company’s North American headquarters were (may still even be) in Chicago.
They had been steadily downsizing that facility, and the company had moved the majority of the operations to where the cheaper labor was to be found – El Paso, Texas, where wages are way lowerthan the national average, and perhaps, on average, the lowest in the entire country.
But don’t take ‘Ol Half Dollar’s word for it, see for yourself in this example:
I’m not sure how accurate “the” lowest is, but suffice to say wages and salaries are pitiful there.
Which is exactly why the company has moved from Chicago to El Paso.
People talk about the move from high tax states to low tax states, and, well, when it comes to any company, and especially manufacturers, it is a two-for-one, because not only are the companies moving to lower their tax liabilities, but they also can reduce their labor costs, substantially.
Perhaps you’ve heard it is a race to the bottom?
Anyway, when I was performing my internship, the company was in the process of finishing-up a soon to be operational, brand new manufacturing facility in, guess where?
If you said Mexico, well you’ve just one yourself a bean burrito!
Sorry though, no guacamole, ’cause, you know, tariffs.
But I digress.
This particular company was setting-up shop in Irapuato, Guanajuato, Mexico.
That’s right – the company is moving for even lower taxes and even lower wages than even the lowest in the United States.
Enter the tariffs on Mexico.
President Trump says the companies will return to the United States.
Well, here’s the thing – Manufacturing, for the most part, is dead in the United States, and whatever manufacturing is left is generally being done by multi-national, global corporations.
Said differently, why would a global (German) company that is apparently vacating the United States altogether because of, in my opinion, not only the higher costs of things like taxes and wages, but also because of the increased burden in dealing with the tight regulatory grip of an overly-restrictive, totally-corrupted, and dumbfoundedly-inept US Federal Government, let alone incapable State and local governments, with equally burdensome, although different, high costs of doing business along with state and local government budget, debt & deficit problems, excessive red tape and extreme bureaucratic-political micro-management, want to return to the United States?
They wouldn’t want to return to the US, and they won’t be returning to the US.
These are huge changes for these companies, and years in the making.
They ain’t gonna just go put on their knee-pads for President Trump.
Finally, a parting, simple question – How can we truly MAGA?
Make America Great Again, before Draining the Swamp?
The answer is that it is impossible to MAGA first.
I don’t think we can MAGA before Civil War II.
And that assumes the US can survive it.
Which I am not so sure about at all.
The companies & jobs are gone.
Companies ain’t comin’ back.
Jobs aren’t coming back.
The Titanic will sink.
Rally ’round him?
– Half Dollar