Shaun Rein on bringing back manufacturing to America

If Trump, Howard Lutnick, Scott Bessent want to bring low end manufacturing back to America to create low paying jobs for Americans, we should make a rule that their kids & grandkids should work in the factories first. 

 

Instead of designing dresses & shoes, Ivanka should sew clothes & cobble shoes together for her brand. 

Instead of Kai hitting golf balls, she should work in a factory making golf balls or the clothes for Tiger Woods, her mother's boyfriend.

Donny Jr could work as a foreman in a rare earth mine or gas field - he's full of enough hot air.

No, I want my kid and future grandkids innovating the next iPhone or drone company, not making them on the factory floor.

I want my descendants staying healthy by running in Nike or Hoka shoes, not making them. 

Yes, China benefits from trade with America.  But we benefit from trade with China too.  Our prosperity over the last 25 years is largely based on the backs of Chinese, Vietnamese, Cambodian workers.

We should be thanking them for making our lives better, not pillorying them. 

We should have a rule - any Congressmen or Cabinet member that supports war or reshoring low end manufacturing should be forced to have their progeny go to battle or work in factories first. 

I'd bet the warmongering and voodoo economic theory would stop immediately.

~ Shaun Rein, LinkedIn post, May 20, 2025

Dani Rodrik on manufacturing productivity

Labor productivity in US manufacturing has grown nearly sixfold since 1950, compared to a mere doubling in the rest of the economy. The result has been a striking increase in the manufacturing sector’s ability to produce goods, but also an equally dramatic decline in its capacity to generate jobs. While value added in manufacturing (at constant prices) has broadly kept pace with the rest of the US economy, six million manufacturing jobs have been lost since 1980, while 73 million non-farm jobs have been created elsewhere (mainly in services).

When Donald Trump took office in January 2017, the share of US manufacturing in non-farm employment was 8.6%. When he left office, that figure had fallen to 8.4%, despite his attempt to shore up employment through import tariffs. And despite Biden’s significantly more ambitious efforts, manufacturing employment has dropped further, to 8.2%. The decline in manufacturing employment as a share of total employment (even if not in absolute terms) seems to be an irreversible trend. 

~ Dani Rodrik, "America's manufacturing renaissance will create few good jobs," Project Syndicate, April 22, 2024

Shaun Rein: manufacturing is not coming back to the U.S.

Don't get me wrong, this is definitely going to bring pain to the Chinese economically.  You're already seeing scores of cheap manufacturing already closing shop and relocating to Vietnam and Cambodia. Let me also be clear, they're moving to cheaper destinations.  They're not going to bring jobs or manufacturing back to the United States.  It's just not going to happen.  American doesn't have the manufacturing ecosystem: workers, land, laws that help promote strong manufacturing.  

You're already seeing TSMC, Taiwan's big semiconductor company, has spent billions of dollars trying to build semiconductor factories in Arizona and they've had huge problems, from a human resource standpoint, from a quality control standpoint and from a regulatory standpoint.  This was supposed to be Joe Biden's baby.  So it's a pipe dream, to use a word that Janet Yellen, the former U.S. Treasury Secretary, said.  It's a pipe dream to bring all this manufacturing back to the United States.

It's much better for China to make what it's good at and the United States to make what they're good at.

~ Shaun Rein, "'Made in USA:' A Wishful Scheme Dressed Up As Policy," 9:55 mark, Thinkers Forum, April 23, 2025

Phil Gramm and Larry Summers on the "hollowing out of American manufacturing"

The primary argument for the implementation of broad-based tariffs is that they will reverse the hollowing out of American manufacturing and reduce the trade deficit, which is causing a "hemorrhaging of America's lifeblood."  Contrary to the repeated claim, there has been no hollowing out of American manufacturing.  Industrial production in the U.S. is at an all-time high.  The U.S. is producing 2.5 times as much real industrial output as it did when we last ran a trade surplus in 1975.  We are producing that record output with the smallest percentage of the labor force since America became fully industrialized.  The percentage of the civilian nonfarm labor force employed in manufacturing peaked in World War II and has been in secular decline ever since.  This has been a great success for productivity and not a failure of trade, as today's full employment attests.

It is telling that the Trump tariffs implemented in mid-2018 and the Biden expansion of those tariffs didn't stop the secular decline in manufacturing employment as a percentage of total employment.  The decline in manufacturing employment is being driven by the same secular forces that caused employment in agriculture during the 20th century to fall from 40% to 2% of the labor force: a vast increase in labor productivity and a decline in manufactured products relative to services.  This is a worldwide phenomenon occurring in both developed and developing economies.

~ Phil Gramm and Larry Summers, "Gramm and Summers: A Letter on Tariffs From Economists to Trump," January 30, 2025

Tim Cook on Chinese manufacturing: "Vocational expertise is very, very deep here" (2018)

There's a confusion about China...  The popular conception is that companies come to China because of low labor costs.  I'm not sure what part of China they go to, but the truth is, China stopped being a low-labor-cost country many years ago.  The reason [for moving jobs to China] is because of the skill.  The quantity of skill in one location and the type of skill it is.  The products we [make] require really advanced tooling and the precision you have to have in tooling and working with the materials we do are state-of-the-art.  And the tooling skill is very deep here.  In the U.S., you could have a meeting of tooling engineers, and I'm not sure we could fill the room.  In China, you could fill multiple football fields.  Vocational expertise is very, very deep here.

~ Tim Cook, "Apple CEO Tim Cook explains why Apple chooses China for manufacturing," 2018

Shaun Rein: "I'm cautiously optimistic over trade between the U.S. and China under Trump"

With Trump, it's quite clear that he's not an ideologue.  He's very transactional.  You see he's criticized Panama, Mexico and Canada and now he's starting to criticize EU.  He's slapping tariffs, slapping criticism, even on America's closest allies.  So that actually lowers the tension with China.  If Trump adds 10% or 60% tariffs in China, it doesn't seem like he's trying to destroy China he's just trying to extract what he considers to be the best trade deal for America and probably for himself.

With Trump, I think Chinese feel that there is an opening.  I'll give an example.  Trump has said, "I don't want NEV [new energy vehicle] automakers to export from China autos into the United States.  I want them to build factories in America, hire American workers and help grow the economy of the United States."  Frankly, that's fair, right?  That's what the Chinese did to GM.  That's what the Chinese did to Ford.  That's what the Chinese did to Volkswagen in the 1990s.  They said to foreign automakers, "If you want to have access to China's growing, swelling middle class, you need to set up joint venture and you need to set up factories in China."  So I think it's fair if Trump, and I think it's frankly fair if Europe, does the same thing to the BYDs, the NIOs and Xpengs of the world and says, "If you want access to America and you want access to Europe, you need to invest in factories in these countries."

The key is that Trump is offering a pathway to Chinese companies.  With Biden it was 100% tariff on Chinese NEVs and it was 100% ban on Chinese NEVs and software...  So Biden basically was banning Chinese NEVs, which is one of China's new productive forces and key pillars for economic growth from ever selling into the United States, while Trump is saying, "Build factories in America."  That gives a pathway.  It's the same thing with TikTok.  Biden wanted to ban TikTok completely, Trump is saying, "Maybe if TikTok sells a 50% stake to American investors, we'll give an avenue."  

I'm actually cautiously optimistic over trade between the U.S. and China under Trump because at least Trump is giving a pathway to Chinese companies to start to invest and grow internationally without fears of sanctions.

~ Shaun Rein, "Why China Brushes Off Trump's Tariffs," Thinkers Forum, 7:20 mark, March 1, 2025

JD Vance: "If you want to be rewarded, build in America"

We started a great American comeback.  [We will] make it easier and more affordable to make things in the United States...  This is not always easy and it doesn't happen overnight...  I have to be honest with you.  The road ahead is long, but we are ready - in just seven weeks - starting to see early indications of the president's vision becoming our shared American reality.

[...]

If you want to be rewarded, build in America.  If you want to be penalized, build outside of America. [prompting chants of "USA! USA!"]  It's as simple as that.

[...]

If we do not protect our nation's manufacturers, we lose a fundamental part of who we are as a people.  Making things, building things, working with our hands is America's heritage.  When we lose the ability to make our own stuff, we abandon a way of life.

~ Vice President JD Vance, speech given to plastics manufacturing facility in Michigan, March 14, 2025

(Source: "Vance says U.S. manufacturing can rebound despite tariff jitters, falling markets," The Philadelphia Enquirer, March 15, 2025)

Marc Faber on China's rise as a manufacturing superpower (2002)

I'll start with emerging markets, where valuations are attractive and expectations are very low.  Since 1990 the markets in the developed countries of Western Europe and the U.S. are up, say, five times.  In emerging economies most markets are down 80% in dollar terms, and earnings are bottoming out.  Money has been flowing out of emerging-market funds for 2-3 years. 

One concern is that Chinese competition will continue to erode the market share of other Asian exporters to Western Europe and the U.S.  In the long run, very few emerging economies will be able to compete with China.  I wouldn't rule out, in 5-10 years' time, the possibility that China becomes the workshop of the world, the way Lancashire [England] did in 1830s.  But China will also become the customer of other emerging economies.  China has a population of 1.2 billion people.  Today less than 1% of the population is outbound, but 5%-10% could be traveling over the next 10-15 years.  That would mean a meaningful influx of tourists into the surrounding countries of Asia, and Australia, New Zealand, the United States and Western Europe.  Food and plantation companies will benefit from Chinese demand.  Companies that cater to domestic consumer demand -- cigarette companies, pharmaceutical companies, software companies -- will also be helped.

~ Marc Faber, "Past and Presents Four pros speak their minds on history, science and compelling stocks," interview by Laura Rublin, Barron's, January 21, 2002

(Emphasis mine.)

Congressman Tom Cole on why he voted for the CHIPS Act

Although this is not a perfect bill and not the one I would have written, it is a step in the right direction toward keeping Communist China at bay and protecting our nation’s economic and security interests.  At a time when China is becoming increasingly aggressive and dangerously trying to command the world order, the CHIPS and Science Act importantly strengthens America’s global competitiveness by investing in our nation’s semiconductor industry and encouraging manufacturing of those critical pieces of technology domestically.  We must secure our industries from foreign adversaries, and that is exactly what this legislation achieves.

~ Congressman Tom Cole (R-Okla.), "These are the 24 House Republicans who broke with the party to support chips and science bill," The Hill, July 28, 2022

Peter Navarro: "Manufacturing is strong as a rock" (2019)

Manufacturing is strong as a rock.

~ Peter Navarro, White House trade adviser, as appeared on CNBC, September 30, 2019

(One day later, the ISM U.S. manufacturing purchasing managers’ index came in at 47.8% in September, the lowest since June 2009.)