Deciding what's best for the U.S. economy and your bank account can be tricky when it comes to imports from low wage countries like China.
Over the past several decades, China's economy has been growing quickly and steadily, which should not come as a surprise to consumers buying goods in the United States. When you see a clothing tag or sticker on a product, there's a good chance the label reads, "Made in China". As a result of its growing economy, the topic of trade between China and the United States frequents news headlines. The conversations which take place around Chinese imports are varied and complex, ranging from worker's rights issues and the environment to manufacturing costs and jobs.
For the purpose of this article, we look at the positive and negative impacts of Chinese imports which affect your everyday life and your personal finances.
Imports from any other country provide a more diverse selection of goods and services available to American consumers.
China's drastically lower manufacturing costs make goods available to consumers at much lower prices. (If Apple manufactured iPads in the U.S., it's estimated they would cost about $970, compared to their current price which is around $300).
Without Chinese imports, we would have no fireworks for celebrating the Fourth of July.
The U.S. has lost five million manufacturing jobs since 2000 largely due to lower labor costs and lighter regulation in countries like China and Mexico.
The volume of imports from China entering the U.S.(just under $500 billion in 2016) and our trade deficit (about $350 billion in 2016) with China, makes our economy somewhat dependent on China.
Due to the all of the complexity surrounding the issue, Chinese imports truly cannot be defined 100% good, 100% bad, or even 100% made in China. Even products stamped with a "Made in China" manufacturing label are probably not completely Chinese sourced. Today's businesses truly operate in a global economy. Although your new sneakers might have been manufactured in China, it's possible their materials were sourced from other countries, and it's likely their design and thought ownership belongs to an American company. A study conducted by the Federal Reserve Bank determined that roughly 55 cents of every dollar a U.S. citizen spends on a good or service imported from China ends up in the pockets of American businesses responsible for design, development, marketing, sales, and transport of the goods.
Are Chinese Imports Good for You?
More than half (55%) of American consumers say that purchasing products made in America is important to them, but their shopping habits tend not to reflect the same priorities. Lots of people tout supporting American made products and local businesses. These individuals certainly are not wrong to do so; we should all stand behind the values in which we believe, and supporting our local economies is a great commitment.
As is true with made in China labels, however, a made in America label doesn't always mean you get a product that was 100% made in the U.S.A. So, even if you have decided that you want to support American businesses and American-made products, you might find it difficult to determine which products actually were made here in the U.S.
Now that you have the facts, you have what it takes to decide for yourself whether you want to support the economy of Chinese imports or do your best to shop American made. For many individuals, households, and families, the consumer choice comes down to budget and which products offer the best value for their price.