How Will the Elections Affect the “Made in China” Issue?

We are deep into what some call the “crazy season” of elections, and the ideals surrounding the topic of made in China are usually an additional source of debate.  The blogosphere is abuzz with questions and prognostications about how our relations with China could change based on which party occupies the Oval Office.

What will the next president do that would make changes to the way American companies and China manufacturers interact?  International trade, and the intended and unintended consequences of policies that are put into place, are extremely complex issues.  And with this issue, as with many of the more complex issues that carry with them emotionally charged elements, presidential candidates often create their own verbal tennis matches and positioning statements to gain what advantage in the polls they can.  Then after the elections, what happens historically is that these issues often seem to be overshadowed by what becomes more pressing matters.

Two notable exceptions regarding trade with China were Richard Nixon and Ronald Regan.  President Nixon, whose Shanghai Communique brought revival to the country’s diplomatic and commercial relations with China, helped bring an end to an unbridgeable impasse spanning almost a quarter of a century. Then, some 20 years later, President Reagan strengthened ties with China manufacturers even further.

Regarding the coming election, Donald Trump has proposed, among other actions, to raise the tariff on goods imported from China and to take action regarding China’s currency valuation.  Hillary Clinton seems to be avoiding the topic and not making this particular topic a talking point.

In preparing for what may come and trying to take meaningful action, a parallel might be drawn from the investing and financial industries.  Overall, our stock market has continued to trend up during “good” as well as “bad” administrations.  The investors that were the most successful year-in and year-out were the ones that did not “politicize” their portfolio.  Shrewd investors build in safety nets, such as limiting their decision making while they are emotionally charged. The most successful also resist falling into what is called the “echo chamber”, seeking out information that only supports their world view.  In other words, they don’t let the fact that their party was not elected influence their investment strategy. Thus, for sharp investors, presidential elections don’t much affect the made in China issue.

The same has been suggested with manufacturing.  Ultimately, it’s the success of the supply chain that sets the trend.  As with investing, the best action each company and individual can take is to do what is best for that company or individual, while resisting the pull of internal bias. Understandably, this is easier said than done.

If your current off shore manufacturing situation is less than ideal, let ITI Manufacturing review your situation and show you solutions specifically designed to benefit your company.  If you are just now beginning to investigate China manufacturing, we can ensure your international supply chain is set up right the first time.  We will be here and will continue to successfully manage our customers’ off shore manufacturing supply chains no matter which party is in office.

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