The best solution - Tax China Goods!

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U_S_ tariffs on Chinese tire imports spark trade dispute

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For many years now businessmen in the West have out sourced manufacturing of goods to Asia where labor was much cheaper as with all production overheads. Communist China took the biggest advantage and opened up its borders and adapted themselves to be the main port of call for those that needed cheap labor.  

International companies and entrepreneurs took advantage of what was on offer in China. China took advantage and improved their infrastructure to become the main manufacturing base for the world.  Large profits where made in the West and by China but of course the West’s manufacturing base shrunk considerably.

Unemployment rose but was controlled because of the natural adaptation of the market place that became more service based to selling cheap products from Asia mainly China.  The biggest problem has been the money flowing mainly one way to China and China increasing its manufacturing output in its drive to improve its infrastructure and modernization of China.        

USA and EU had seen this problem worsening within the last decade and had failed to stop cheap goods crossing their borders. USA has tried to slow down the supply of oil and gas to Asia this led to two wars Iraq and Afghanistan both ends of oil a proposed oil pipeline and a gas pipe line from the Caspian Basin designed to supply China and India.  

Eventually the bubble burst and the plastic debt society in the USA fell a part the housing and property market collapsed due to failure of people and business being able to keep up with their housing and property loans.  The rising house and property prices had final collapsed and of course much of these properties had secured loans in the banks. When the last domino actually fell, the World then saw one of its biggest recession’s.  US bank securities became practically worthless.

The service based companies and those that relied on manufactured parts from Asia and China found the need to down size as citizens buying power had shrunk due to the hype and worry citizens would loose jobs. Stock Markets around the world suffered losses through hype and down sizing of companies etc.

Government decided to try to boost and stabilize their economies by throwing and investing public tax funds at the problem. It was in fact only just part of a solution of a problem that has only been delayed for a while.

China still has a large and growing manufacturing base it survived the recession at present its exports have just been culled by 50%.  As more people start to get more confidence in buying goods, the international corporations will start to buy and stock their shelves.

The real problem is the fact that the West has very weak manufacturing bases and the solution is these bases need to be strengthened that can only be done by making China a less attractive place to have goods manufactured.

China certainly is ready and realizes its world market will shrink it has concentrated its manufacturing market to selling more products within in its own borders.  The west now has to place heavy tax certain goods manufactured in China and Asia in a slow process to force the international companies and entrepreneurs to buy from home. The west has only one real option that of manufacturing goods at home of which will decrease unemployment and stabilize economies.

China of course will shout and rave, but wish to keep a sensible slice of the world market. The Chinese are not stupid.  But if the West does not take action now, that to me at least will look to be stupid.           

Obama smacked a heavy tax on tires from China, could this be the first sign at least USA is waking up to the real solution to a very tricky problem and the real need to kick start manufacturing at home?