Friday, October 3, 2008

U.S Must Prepare for Manufacturing Trade Wars

How did or does this happen? Asian leaders duping our leaders to take advantage of our free trade policies with there predatory trade policies that re draining the USA of our economic wealth?

Cheep labor, visions of huge markets dancing in their heads, the hope for hugs profits, (sounds like a little kid at Christmas) has seduced our pollitions and international leaders, corporate owners and managers into submission. They have and are continuing to dismantle our wealth producing industries. These people, our people have outsourced labor, capital, technology, R&D, manufacturing know-how and trade secrets. Heck, 75% of my company’s competition comes from India. And again these same people, our people, have no loyalty or allegiance (even if they say the pledge of allegiance daily) to the United States.

America had a trade deficit of $712 Billion in 2007. With China alone it was $217 Billion which is the largest ever with 1 single company. Products such as computers, televisions, appliances, house wares, heating, cooling, and lawn and garden equipment all once major parts of American Manufacturing have been replaced by companies and brands coming out of China. We have lost complete industries not to free trade but poor choices, bad trade agreements and closed boarders with our “free trade” partners.

Trade, trade with ALL countries is necessary of American and the world to prosper, but it must be balanced trade. The countries (USA) total national debt is (soon to be was) $9 Trillion with about $5 Trillion owed to foreign countries and 41.3 Trillion owned to China. To me this all points to an economic crisis. I could never run my home or business this way, how can we run our country this way?

A country living with a huge trade deficit is like a person living above and beyond their means. You can’t do it forever. If you were to lose your company or job you could still live off of your established credit (for a while) by increasing your person debt until you ran out of credit. The difference here is that the government can print up more FERNS (Federal Reserve Notes) or do you call it money, and we can’t!

The US dollar over the last 7 years has lost more than 50% of its value in relation to the euro and it is my belief that unless we get our collective butts together this will continue. This is in addition to the $5 Trillion America owes to foreign countries. In addition to the 8000 US companies which are foreign owner with an additional value of another $8 Trillion.

If the US continues to blindly follow the ideology of “Free Trade” the damage caused by the predatory trade policies of others will continue to strap us down with huge trade deficits and an equally huge national debt. Most Americans also have the belief that the country is a super power. Ya right a military superpower but unfortunately a second world class economic power.

China also promotes exports and discourages imports, but unlike the US, they keep wages low, rebate value added taxes on their exports and charge value added taxes on imports. They counter fit and steal copyrights, trademarks and patents. They provide domestic industries with local tax incentives with special financing and charge tariffs on imports. They also target specific industries to attempt to monopolize it. No US company or other openly free trade company or country can compete with these predatory practices, all of which VIOLATE the World Trade Organization (WTO) regulations.

The US constitution states “Congress shall have the power to regulate commerce with foreign nations” but Congress has given this control to the WTO.

I am one of the biggest advocates of free open level playing field trade you will find in the world, but not one sided trade policies. I strongly believe that the US Congress with the support of the President and the 50 States must immediately cancel the United States membership in the WTO until such time that China and our trading partners wish to play fairly with all rules being equal! If not, Asian Countries specifically will contine there predator trade practices and continue to either destroy US manufacturing segments or buy the companies outright.

Our career politicians sitting in Washington just cant seem to get there eyes and ears out of the beltway and see what is really going on the in the country. They don’t see or understand the true economic crisis, nor do either of the presidential candidates. Yes, I’m and equal opportunity questioner.

Larson note: If the words seem strong look around. It is so blatant that it is impossible to miss. I am a lover, a deep strong proponent and lover of free trade if it is free and open in both directions. 75% or my competition comes from outside the US. Wonderful, bring them on baby we here at Larson's are ready for the competition. I am a deep proponent of changing the immigration and green card laws of the United States. But I am not a lover of one sided trade policies. Can the US survive? Yes of course. Can the world right itself? Naturally. This happens and will continue to happen as it has thought out history. I only ask will you and your companies be better off in 5 or 10 years than you are now if the status quo continues?

Howard Larson
Larson & Associates
Telesales & Target Marketing Professionals for new account acquisition
Making good businesses great and great businesses even better

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