“Bears make money, bulls make money, pigs get slaughtered” is a common saying on Wall Street and in the business world. It warns against excessive greed and risk-taking. In this context, China has become a “pig” over the last 40 years by hoarding low-end manufacturing, devastating industries in countries like Brazil, Argentina, Sri Lanka, and India, everywhere.
China’s approach and apparent goal resembles England’s during the Industrial Revolution, where England dominated global manufacturing. England imported raw materials from its colonies and exported finished goods, creating a system that benefited England at the expense of its colonies.
Today, China’s dominance in low-end manufacturing is unsustainable and harmful. In a world with vast unemployed and underemployed populations, there’s no justification for China to monopolize this sector. This imbalance creates economic instability and limits opportunities for developing nations, creates dollar scarcity which hurts the dollar as a reserve currency – all to the benefit of: China.
China’s dominance in low-end manufacturing has had a devastating impact on Brazil, arguably more so than on the United States and far worse than any other country.
Consider Brazil’s pharmaceutical industry:
- 1980: Brazil imported about 50% of its pharmaceutical needs.
- Today: Brazil imports 98.5% of its pharmaceutical needs.
This demonstrates how China’s aggressive industrial policies have crippled domestic industries in Brazil. China’s high output, strategic industrial planning, and generous subsidies have allowed it to corner entire markets, stifling growth in other countries.
The footwear industry provides another striking example:
- 1990: China controlled 8% of global footwear production.
- 2010: China controlled 60% of global footwear production.
While Brazil’s footwear production did increase from 425 million pairs in 1980 to 854 million pairs in 2023, this growth is far less than what it could have been without China’s dominance. Had China not implemented its aggressive industrial policies, Brazil likely would have captured a much larger share of the global footwear market, creating tens of thousands of additional jobs.
This illustrates how China’s practices have harmed Brazil’s economic development and limited its potential for job creation.
China’s strategy of dominating entire industries is a deliberate attempt to become the world’s manufacturing superpower. This has led to de-industrialization in countries like Argentina and Brazil. As these countries become increasingly reliant on cheap Chinese goods, China can then exert economic pressure by requiring payment in Yuan or the BRICS currency.
This strategy is already underway, with China-leaning countries like Brazil, Iran, Russia, Bangladesh, and Argentina showing a willingness to adopt these alternative currencies. While Argentina’s recent shift may be driven by dollar scarcity, it nonetheless plays into China’s long-term plan.
It’s time to end China’s dominance in low-end manufacturing. China’s subsidized monopoly is detrimental to the global economy and needs to be challenged.
With Trump returning to office, the U.S. has an opportunity to take a stronger stance against China. While Biden’s ban on high-end technology sales to China is a positive step, it doesn’t go far enough to dismantle the China-centric world order. The U.S. needs to implement bolder policies to counter China’s dominance and promote a more balanced global economy.
The only solution is to eliminate China’s ability to undercut global manufacturing prices. This requires imposing tariffs on Chinese products to offset the impact of subsidies, currency manipulation, and strategic trade practices employed by the Chinese Communist Party. These tariffs could range from 200% to 300% on all products that can be manufactured elsewhere.
The second phase involves prioritizing preferred manufacturing locations in Southeast Asian and even some European countries, as well as US states for computers and electronics. Textile and shoe production could be shifted to Latin America.
The third phase focuses on re-establishing strong trade relationships with countries that have recently increased trade with China. This means actively engaging with nations like Brazil, who may have shifted towards China due to economic pressure and offering to buy more from them, if Brazil will reciprocate.
The things that can be made or gained from other countries are white goods, textiles, shoes, most commodities, steel, iron, aluminum products. This list is in this website. Yes, it would be hard to move all computer manufacturing currently made in China to the USA for the USA. However, there are over a dozen countries in the world that manufacture laptop computers all of them can absorb this.
The effects on China’s dream to have a stranglehold on manufacturing would be very pronounced immediately, at least 2 million to 3 million jobs in China dedicated to textiles and shoe manufacturing specifically dedicated to the $19.6 billion that was bought by the United States.
The USA is not suddenly going to start manufacturing shoes, and I am not saying it is prudent to send this to Mexico as well. It is key that the commerce department make sure this goes primarily to South American to shore up the relationships. If each of the primary five largest economies in South America was to produce $4 billion dollars in textile and shoe exports to the United States, then these places are going to be raised up.
This is not so easily done as the first stop shop for most apparel manufacturing is Bangladesh, and we have to face the facts, a quota will have to be placed into prevent more from going to Bangladesh.
Many goods can be sourced from countries other than China, including white goods, textiles, shoes, most commodities, and metal products (steel, iron, aluminum). I am surprised to find that despite the first round of Tariffs on Chinese steel, iron and aluminum products, these imports still managed to enter the USA from China. In 2023 the total value was $1.7 billion. This shows that certain products need tariffs high enough where they will never be able to
While shifting all computer manufacturing from China to the US would be challenging, the global capacity exists to absorb this production. Over a dozen countries currently manufacture laptops and could increase their output.
The impact on China’s manufacturing dominance would be significant and immediate. The US alone imports $19.6 billion in textiles, apparel and shoes from China, representing an estimated 2-3 million Chinese jobs.
The goal is not for the US to start manufacturing these goods itself, nor is it ideal to rely heavily on Mexico. Instead, the Commerce Department should prioritize shifting this production to South America to strengthen diplomatic ties and counter Chinese influence via stronger trade partnerships.
Distributing $19.6 billion in textile and shoe exports across the five largest South American economies would significantly boost their development and intertwine the United States, with these countries. This increase in trade will also assist the dollar as the permenant reserve currency. However, this requires careful management, potentially including quotas and tariffs to limit production increases in Bangladesh, a major apparel manufacturer that would be strong competition to other regions of the world.
