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Trump's new trade deals with China could turn out bad for American workers. Let’s start with the issue of forced technology transfer. Boeing is upset, because under the current rules, if they set up shop in China, they are going to have to partner with a company that is likely to be a competitor a few years down the road. Suppose tough-talking Trump forces China to accept rules that prohibit these mandated partnerships. Under his new deal, if Boeing wants to set up shop in China it just starts building a new facility, no partner needed. Standard economics would tell us that this will make Boeing and other US companies more likely to set up operations in China. This is obviously good from the standpoint of Boeing’s profits, but why exactly should US workers be happy about a change that
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Trump's new trade deals with China could turn out bad for American workers.Trump's new trade deals with China could turn out bad for American workers. Let’s start with the issue of forced technology transfer. Boeing is upset, because under the current rules, if they set up shop in China, they are going to have to partner with a company that is likely to be a competitor a few years down the road. Suppose tough-talking Trump forces China to accept rules that prohibit these mandated partnerships. Under his new deal, if Boeing wants to set up shop in China it just starts building a new facility, no partner needed. Standard economics would tell us that this will make Boeing and other US companies more likely to set up operations in China. This is obviously good from the standpoint of Boeing’s profits, but why exactly should US workers be happy about a change that
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Mike Norman considers the following as important:
This could be interesting, too:
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Let’s start with the issue of forced technology transfer. Boeing is upset, because under the current rules, if they set up shop in China, they are going to have to partner with a company that is likely to be a competitor a few years down the road.
Suppose tough-talking Trump forces China to accept rules that prohibit these mandated partnerships. Under his new deal, if Boeing wants to set up shop in China it just starts building a new facility, no partner needed.
Standard economics would tell us that this will make Boeing and other US companies more likely to set up operations in China. This is obviously good from the standpoint of Boeing’s profits, but why exactly should US workers be happy about a change that will facilitate the outsourcing of US jobs?
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