This right here is an underreported but major component of how this trade war shit goes down. Just as one angle into this, it benefits the Chinese manufacturers to undercut American manufacturing by a bit. Just a little bit is all that’s needed, because the buyers for raw materials buy in the thousands to tens of millions. Just as an example, how much wood do you think is needed to make every stock pallet in the USA? Every single one to every store in every city in every state. If you replace 1% of it annually, you’re talking about miles of raw timber and months of work for lumberyards.
The Chinese don’t even have to make a profit, or even break even, the apparatus to produce such volumes of raw goods at the rate the market needs is massive. It costs billions a year in salaries, hundreds of millions a year in operating expenses, supplies, electricity, gas, maintenance and so on. A few missed sales is hundreds of millions of dollars sprinkled throughout this infrastructure, which makes those operating margins thinner.
You undercut your opponents in another country for a year and you’ll see consolidations. You do it for five years and you’ll see the massive monopolies choke on retraining and administrative costs for all the organizations they’ve devoured. You do it for ten years and soon they’ll be selling you chunks of their holdings at rock bottom prices just to get rid of them. You do it for long enough and soon there is no more foreign competition. Now the price is what you say it is, because any resistance to whatever demands you make will take a half decade and billions in capital to get off the ground.
This is what it motherfucking means to ship American jobs overseas.
some under privileged gay minority black guy got his feelings hurt!? Quick, someone call in Obama to help apologize for the wrongs this man was given!
