[Text/Watchman Network Chen Sijia] US President Trump insisted on starting the "tariff war", imposing high tariffs on China, attempting to use tariff barriers to bring manufacturing back to the United States. However, many American business owners have warned that achieving "100% American-made" is unrealistic.

"Why is it so difficult to achieve full American production?" The Wall Street Journal reported on April 28 that due to the fact that the U.S. does not produce many key components or can only supply a small number of components at higher prices, American companies now find it very difficult to establish a supply chain that is completely domestically produced in the U.S. Some American businesses complain that they cannot even find suitable components like bearings in the U.S.

The article gives an example: Decked Company, headquartered in Idaho, specializes in producing truck accessories. Since its establishment, the company has been committed to achieving "all-American production." Approximately 95% of its materials are purchased from American suppliers, but it has never been able to transfer the remaining 5% of the supply to the U.S.

Bill Banta, CEO of Decked Company, said that they still need to purchase ball bearings from China as there are no competitive alternative sources in the U.S. in terms of price and delivery time.

Warehouse of Decked Company in Idaho, U.S., The Wall Street Journal

Ricky Cousido, co-owner of New York-based Rapid Plastics, which mainly produces high-end hangers for American department stores and other retailers, told The Wall Street Journal that over two decades ago, the American supplier providing metal hooks for his company had closed down or moved overseas.

Cousido said that Rapid Plastics now primarily imports hooks and other metal parts from China, so Trump's tariff policy has rapidly increased the company's costs. He revealed that the rod for the skirt rack cost 40 cents before the tariff, but now it costs 80 cents.

He believes that the Trump administration needs to provide exemptions for companies that cannot find American suppliers, "I cannot beg some companies, 'Open your doors and produce these products for us'."

Haas Automation, an industrial machinery manufacturer based in California, also pointed out that there are no foundries in the U.S. capable of meeting the company's demand for one hundred million pounds (about 45,000 tons) of cast iron per year, so they need to import cast iron from China. Peter Zierhut, vice president of Haas Automation, said that it is unlikely that enough foundries will be established domestically in the U.S.

He told The Wall Street Journal that building a new foundry in the U.S. now may require hundreds of millions of dollars in investment to produce products worth just a few dollars per pound, and finding workers is also very difficult, "Cast iron is a low-tech industry, but establishing a business in the U.S. is not realistic."

Zierhut revealed that Haas Automation has cut production at its Oxnard, California factory. The company is also building a $500 million factory in Nevada, but Zierhut worries that if tariffs are not canceled, the opening date of the factory will be delayed.

The Wall Street Journal pointed out that Trump tried to bring manufacturing back to the U.S. through tariff barriers, but many manufacturers producing products in the U.S. frankly stated that it is difficult to establish a supply chain that is completely domestically produced in the U.S. These companies said that the U.S. does not produce some key components and materials, or can only provide supplies that are more expensive and fewer in quantity.

As Trump’s administration approaches 100 days in office again, its backward policies on tariff policies have triggered strong opposition and concerns within the U.S.

The New York Times recently published an article stating that the U.S. imposing up to 145% tariffs on Chinese products may sever the import of most products. The U.S. is also planning to impose high tariffs on other countries, meaning that suppliers trying to procure from other countries may still face pressure on production costs.

Chad P. Bown, a senior researcher at the Peterson Institute for International Economics, said that compared to Trump's first term, the U.S. is imposing tariffs on Chinese products at a higher rate, faster pace, and involving many new consumer goods. These measures' speed and scale mean that costs are more likely to be passed on to American consumers. He believes that "now, the possibility of a significant price increase when consumers buy such products is much greater."

On April 24, He Yadi, spokesperson for the Ministry of Commerce of China, responded to the U.S. statement about "cooling off tariffs" by saying that the U.S. abuse of tariffs violates basic economic laws and market rules. It not only fails to help solve the U.S.' own problems but also seriously disrupts the international trade order, interfering with enterprises' normal production and operation and people's daily life consumption. It has already faced strong opposition from the international community and the U.S. domestically. "The bell must be untied by the one who tied it," the unilateral tariff measures were initiated by the U.S. If the U.S. really wants to solve the problem, it should face the rational voices from the international community and domestic parties, completely cancel all unilateral tariff measures against China, and solve differences through equal dialogue.

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Original source: https://www.toutiao.com/article/7498707402737402394/

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