Outsourcing in the Age of Looming Trade Wars
The United States Constitution grants specific powers to the Congress to lay down taxes or fees to goods entering the United States. These fees are otherwise known as tariffs and when you consider that the Constitution is relatively brief, for tariffs to warrant a mention speaks to their importantance.
So clearly, the idea of tariffs was an important one in the original formation of the present system.
The Founding Fathers spoke at the time about the necessity to even the playing field at the doors of US markets, protect unilateral fair trade and make the American producer creating goods in the US and employing American workers better protected.
It is common sense that the conditions both in regulation and cost can be vastly different in foreign countries than it is domestically. For proof, one need only look at the fact of outsourcing.
If there is nothing to be gained by going through the initially cumbersome exercise of off-shoring, then why would a company do it.
Currently, the economy of the United States is mired in what many economists and historians believe to be an inevitable transition into the new information age and away from the manufacturing or industrial age. The manufacturing or industrial age was highlighted by middle class worker population and relatively more broad-based prosperity. The current times are the information age and have required different educations and skill levels from workers than in the industrial age. We have also seen the proliferation of out sourcing of jobs.
The resistance among many in the United States to the supposed inevitability of lost jobs to the new economy has led to a reexamination of the idea of tariffs as a weapon in making US produced goods more viable domestically.
In his book “How Americans Can Buy American: The Power of Consumer Patriotism” Roger Simmermaker reframes the Tariff debate in a more favorable light than it is treated by many economic policy makers.
Many leaders in charge of the US economy have rejected tariffs as antiquated and ultimately harmful to the US economy. Mr. Simmermaker points out that history doesn’t actually lend itself to the conclusion that tariffs cause worsening economic conditions in the US.
What would more restrictive trade policy generally or tariff’s specifically mean to the producers of goods domestically?
Vornado has built a future business model around it’s Vornado AQS 500 air purifier. The Vornado AQS 500 is produced domestically out of Kansas. The company very likely would benefit to the lessened competition in the US market that tariffs would bring.
Also worth considering is the imposing of tariffs on goods coming from foreign nations stands to drive costs higher for companies that practice out sourcing of jobs. Ultimately, this could help foster more job growth domestically. The benefits of American workers working when they weren’t before, are namely the increased purchasing power in all markets for these workers.
The Vornado AQS 500 would also be ahead of equivalent manufacturers who arrived late to domestic production. Vornado has already made the systemic and infrastructure investments that competitors have not.