What If American Stores Stop Buying Chinese Imports?

This article is little unusual for a Monday, when the readership is at its peak. Generally, like other bloggers, I tend to publish articles on practical guidance or practice on Mondays.

For once, let me go out of my way and write on an imaginary situation, a ‘what if ‘ kind of world where in US stores ‘Made in China’ goods will not be seen.

A majority of stuff in big US departmental store chains is imported from China. (imports from other countries are negligible as compared to China). From pen to playbook, name a durable merchandise at a Wal-Mart or a Target and in all probability, it will be ‘Made in China’.

Our Govt. can not take decision to put restriction on Chinese imports, because it will be against the order of international trade. But our stores could very well implement a ban.

Now let’s get to the imaginary situation, if these big departmental stores stops importing Chinese goods, how the world will look like.

Image Source http://www.economicpopulist.org

The most immediate aftermath (till first 3 years) will be raised cost of living for us, the dishes and clothes will be costlier. In order for our kids to play, you have to shell out more money. Eventually total US savings will erode rapidly. We, the frugal bloggers will cry foul, we will start  inventing and writing frugal methods with renewed vigor.

As with every major change in market, many of us will become poorer. Store sales will go down drastically, resulting in closing out and eventual job loss.

China will start seeing trade imbalance and rapid erosion of its massive foreign currency reserve; it will start selling US bonds in revenge. Value of dollar will go down and US manufacturers will see profit in selling stuffs abroad. As Chinese economy starts going down, it will cease to be a world buyer of oil, raw materials and all other stuff that it now imports, which will make many more economies vulnerable.

American tech giants will feel the heat of retaliation from China. But honestly, do you think 1.5B people in China buying genuine copies of software? You are dreaming like me if you think that way.

In short there will be catastrophe in short-term and we all will feel the heat. Our spending will grow and some of us may have to tap in to savings to make ends meet. But we will reuse and re-purpose our possessions and live life more frugally. Dow will probably hover around 5/6K mark for some time or years. But, in most likelihood, your job will be saved because of the medium to long-term potential of job growth in USA.

In medium term( 3 years to 10 years), a lot of local manufacturing factories will mushroom, we will have industrial belts coming up in the outskirts of the cities. Unemployment (read cause of unemployment) will drastically go down to probably sub 1%, almost all will be employed, including the people who got displaced in the immediate aftermath.

What about working for iPhone case manufacturers in Dakota and making cups and plates in North Carolina? Imagine city of Detroit becoming double its size in next 5 years. (yes I am a populist writer!)

Because there will be jobs abound, people from other countries will migrate in greater number, resulting in increased economics, new home sells, new car sells, greater export to other countries, stronger GDP growth. Probably we will have another boomer generation coming up.

US treasuries which were unwanted in the shorter term, will now have buyers this time from within the country border, surely govt. will love it.

In the Long run (More than 10 years), welcome to wonderland where every one has a job, a car and a home. We will have healthy wage because of the shortage of workers.

Image Source : http://www.nowpublic.com

Spare a thought for Chinese workers. Following America’s success, businesses from other countries would implement similar strategies and Chinese export will sink but, Chinese population will be enough to consume all the industrial produce and due to less competition, average Chinese worker’s wage will hopefully increase.

Implementation of this wonderland is tough and herculean task. We need to help our stores implementing this, we have to stop ordering cheap Chinese goods over internet. We have to sop buying from new stores which will be created to sell Chinese products.

It’s not about Wal-Mart or Target, its about us who made these stores stack goods from countries like China, where labor is as cheap as 50C per day. This is an interesting blog dedicated to the topic in entirety. Probably it won’t be wrong saying that we are responsible for our job loss.

Found on Web : If 200 million Americans refuse to buy just $20 worth of Chinese goods, that’s a billion dollar trade imbalance resolved in our favor.

There might be an argument against me favoring ‘World trade’ and its principles. But, There were lesser world trade at the time of our grand parents, was the world less happier then than today? people might argue that blocking free world trade hampers innovation, but except for drugs (which is mostly not imported), which other innovation is essential for living?

Let me know how do you feel about it? Are you with me or against me? And, I have developed thick skin by now; let the talk be free-flowing.

Only aspect about which I am worried is the possibility of Chinese (supposedly state sponsored, I heard) hacking on to my website to stop me from publishing (idea is very far-fetched though). I have my backup ready and its stored offline, I can recover soon. This hypothetical incident would put me in top-tier of bloggers, haha.. :)

Disclaimer: As I said, this article is an imagination and represents only my views. It’s not influenced by any other person or organization. I didn’t receive any monetary compensation for writing this article.

is a husband and working as a software professional for a Fortune 100 corporation in Florida. Thanks for visiting the blog.

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Comments

  1. says

    Very interesting post. I would question if the USA could afford making their own products. You pay people at a lot higher wage than the Chinese and you are already in a recession. I do think it would be good though to invest in one’s own economy before investing in another. Buying local goods is a way to do that. If you can’t get around the Walmart’s etc, then at least by local food. It is a step in the right direction and greener too.

       4 likes

  2. says

    I try not to buy Chinese products but it has become extremely hard. When I was a kid, my mom would look for and buy American made, now most of what I find is Chinese made. I would be willing to pay a bit higher for American made, even more for better quality American made. The problem is getting companies to produce in America.

       4 likes

  3. says

    The thing is that even if all production in China were transferred to the US, you might get 1 US worker for every 20 or even 50 Chinese workers.

    Most work in the US isn’t done by hand, but with human assisted machinery–capital goods. The same can’t be said in China. Manufacturing companies HAVE to use machinery to make goods in the US because the minimum wage wouldn’t allow them to make the same products in the US with unaided workers.

    Recently, trade dumping has allowed us to enjoy artificially lower prices for goods. Solar panels are heavily subsidized by the Chinese government and thus most are now manufactured in China. I suppose we could claim this to be a bad thing, but when you really think about it, I don’t care if Chinese manufacturers sell us $100 goods for $70 because the government is tossing in a $30 subsidy. Free goods, free productivity, free money!

       1 likes

  4. says

    One of the reasons this will ot happen is too many U.S. companies use china to manufacture goods for them. Hence, we have a conflict of interest. U.S. companies manufacture in China because it is considerably cheaper.

       0 likes

  5. says

    Could it be that easy? Even if we boycott made in China, things will still be much cheaper to manufacture in Mexico. Boycott Mexico? There is the whole continent below that will still make things cheaper than here.
    Maybe the 1.5 billion Chinese are not paying for a legit copy of software, but I’m sure many businesses are buying legitimate licenses. Chinese people love luxury goods and it’s a huge market for brand names. I don’t think we can reverse globalization.

       0 likes

  6. says

    I have always wondered why companies haven’t started bragging about what is actually made in America? If two products were next to each other, I would pay a premium knowing what it would mean for our country (how much premium would depend on the product)

       4 likes

  7. says

    It’s remarkably difficult to find goods made in America nowadays. I remember an NPR segment with a person who started a blog or website trying to find American versions of all sorts of products. In many cases she couldn’t. I have to say that the big box / cheap goods stores give me the willies – it’s just sickening to think that these things could be manufactured, shipped internationally, transported to a big box and sold for a buck or two. That’s not progress.

       2 likes

    • says

      I can’t agree more. Unless stores do this as consumers we should start boycotting foreign things, seriously! Thanks for stopping by

         4 likes

  8. Art Nye says

    I like your idea but to go another way is for the U.S. to have a law that we can not import more than 40% of any product sold here unless the item is specific to a region such as oil or minerals.

       2 likes

    • says

      This is excellent idea, though the percentage can be debated further, I would rather tend to 30% at max. We need some kind of movement enough of cheap low quality items at the cost of job loss for us

         1 likes

  9. Joseph silva says

    As you mentiend our cost of living will go higher but eventually we wiil be able to fix our Problems like unemployment etc: I totally agree with but

       1 likes

  10. Emma says

    Don’t forget that every dollar we spend on things made in China, or any other country, represesnts our support for the way they produced that product, or what they are financing with their profit. If you buy something made by a sweat shop or slaves, then you are saying “hey, I support the methods you used to make this so cheap.” Or if the company is producing tons of toxic waste that is being dumped in our ocean and you buy their product you say “wow, the price on this is great! keep doing what you’re doing!” Our money is permission to continue with their methods, and by refusing to pay, we are sending the message that we won’t buy until they change.

       8 likes

  11. Charles Bennett says

    Yes, I would love to have this happen. The first few years would be hell, but if we could just push through it as a nation we could come back out on top and hopefully watch as our National Debt will start going in the opposite direction.

    Sorry for spelling errors.

       3 likes

  12. Ruby says

    This plan might work better if American stores gradually stop buying Chinese products. When Americans insist on buying more products that are made in the USA, manufacturers will bring jobs back to the USA to meet this demand. Saving the US economy is a task that can only be accomplished by the American people. If we not find a way to do this, no one will, not the government and not the corporations.

       4 likes

  13. madmilker says

    1975 was the last year America had a trade surplus.

    It was also the year Sam and Helen Walton were east of Seoul inside a factory listening to a “whistle while you work” song…..

    but what a lot of Americans forget…

    it was the year Jimmy Hoffa disappeared.

    Wal*Mart puts less than 5% foreign in all their stores in China….less than 5% foreign.

    They took the hyphen from the name years ago and replaced it with a big single star.

    They moved the Global Procurement Office to Hong Kong and than to China.

    They made a port deal in Mexico in 2006.

    They have looked at all 57….oops! 50 state capital building blueprints.

    They hired an experienced lobbyist, field organizer and media relations strategist. He came from Edelman, a major global communications firm. The same firm that admitted it was behind fake blogs created for client Wal-Mart.

    They closed the office in Russia but hired a Russian which is said to have “irretrievably soured relations” with First Deputy Prime Minister Viktor Zubkov and his team, and with most influential United Russia members.

    yeap!

    America’s last year of trade surplus was 1975….

    America is over $57 trillion in debt.

    The Social Security System has a $100 trillion shortfall.

    sad!!!

    Made in America is the only way out of this mess cause foreign made put US here.

    and don’t come back with that “foreign made is cheaper” crap.

    Fifteen supper cargo ships pollute as mush as 760 million automobiles. That is about the total cars on Earth today.

    It takes over $9 billion dollars from ALL American taxpayers to clean fish from ballast tanks of ships each year.

    So-call cheaper items only breed cheaper wages somewhere else and more and more Retail in America.

    Retail makes NOTHING.

    and with America having a 6 to 1 trade deficit with China….

    the American government has to sell more and more Bonds(debt) in order to get those George Washington’s (dollars) back to America.

    STOP blaming the banks…..We the People didn’t all of this when they as consumers sent all the George Washington’s to foreign lands thinking they were going to live better with foreigners making everything.

    Well, We the People drained America of what makes a country strong….the currency. And with a period of fifty years….and the currency all gone….the American people ain’t got a pot to pee in nor a window to throw it from.

    You young people had better put those gadgets down and start thinking for yourself again.

    this O’fart has typed enough.

    God Bless!

       5 likes

  14. madmilker says

    Forgive the way I type and spell. I have only a little book learning but do know this…

    “Observe good faith and justice toward all nations. Cultivate peace and harmony with all… The Nation which indulges toward another an habitual hatred or an habitual fondness is in some degree a slave. It is a slave to its animosity or to its affection, either of which is sufficient to lead it astray from its duty and its interest … Tis our true policy to steer clear of permanent alliances, with any portion of the foreign world.” – George Washington, Farewell Address, 17 Sept. 1796.

    He didn’t write that for himself….he wrote it for US.

       1 likes

  15. David says

    1. Where did you get the idea that Chinese workers make 50 cents a day?
    2. What makes you so sure that people of this country will take jobs that requires them to work in the factory who needs to make 1000 cloths or 500 jackets or 200 TVs a day? There are jobs in the farm in some states, and jobs in factories in TX where only some new immigrants want to take. Do you want to take those jobs?
    3. How are you thinking if the stores stop getting goods from china and they won’t get goods from other cheaper countries? You think we, as human, wants to buy more expensive stuffs? And work harder everyday in the factories? And get back to where we were 50 years ago?
    4. You think we want to spend 30 dollar a dish vs 3 dollar in our life, just to because we have more jobs that pays 10 dollar per hour but require people to make 500 dishes a day? and live a life like “working harder in the factory and getting paid like cheap and paying more in the store”. What you think?

       0 likes

  16. Chuck says

    David

    If people want the economy to improve and the debt go down the only way to do that is to stop buying foreign so that the money we spend can come back to us instead of buying cheap foreign stuff and helping out their economies while our economy drops to nothing.
    How long can we keep buying before we run out of money?

       5 likes

  17. Frankie says

    The Chinese have been eroding the West’s manufacturing base for some time now. Our greed and need to keep up with the Jones’ at any cost is leading to our downfall. Marketing, media and low interest rates sure have turned the USA in particular into a giant retail mall! We must educate the consumers into understanding the repercussions of their purchases of foreign goods. I have always said that if you buy from “Walmart” you are probably buying yourself out of a job. By buying Chinese made goods from Walmart on the cheap you transfer thousands of USA (West) jobs off-shore. So, it seems that the low income earners are the ones that can least afford to buy cheap – a trap which is hard to comprehend. May I suggest that supermarkets be compelled to label their shelves with the name if the manufacturing country – like they do in wine and liquor stores, so that people can immediately see who their hard earned cash is supporting! Also, lobby groups should advertise via pamphlet, media, word of mouth, groups etc. to persuade consumers to start making more patriotic choices and eventually start bringing manufacturing jobs back to the USA, Canada, Europe etc.

       3 likes

  18. Robert B says

    I only buy American made goods. I’ve actually wanted to buy an iPhone 4s or Google Nexus but have chosen to avoid all companiies that manufacturer in China (even US companies). I will not support slave labor. Think about it. Wages to make the same product has gone down but the price of the product has remained the same or has risen. SAY NO to foreign made goods & products!

       4 likes

  19. Denny says

    I feel that we should insist on buying our larger products (refrigerators, ovens, autos, etc.) made in America. America should produce the best possible quality and charge a higher price to reflect that. Paying more for quality large purchases that last pays off as better jobs allow Americans to support themselves, save for their own retirement, etc. Other countries will want our high quality products as well. We can certainly purchase smaller items produced overseas but small ticket items. The truth is we in America purchase junk all day long. Look around the big box stores. It’s all junk. We need to be selective and smart with our purchases and send a message.

       1 likes

  20. Haven says

    While I don’t believe in isolationism,I do believe in America. The long and short of this is we did this to ourselves, little by little. If we want to fix this, and I implore you to do so, we have to fix it little by little. You don’t stop buying ALL things made in china, you pick one industry and kill it. Buy NOTHING from that industry (I propose iphones to start) and send a clear signal that the PEOPLE of America are going to do what their government cannot do. They are turning off the tap.

    Now, lest you cry that I am starting what will be a decline in Americas future, let me remind you of the Boston Tea Party. China is taking over our country day by day, dollar by dollar. They already own our bonds. They are moving to buy up all our land. Think this is not so? So the chinese call in their markers – screw them! We just refuse to pay. There are dozens of countries we have never paid and many more who have never paid us back.

    People, your country is under attack. This is no less dangerous than it was when Japan attacked us or Germany. We stood up then and fought and beat them back and we better do it now. This isn’t a war over the Pacific – it’s a war to determine who will own the Pacific and the Atlantic and the whole of the USA.

    Join me now! Fight! If you are willing to spend $5 and 1 hour per month, I will show you how to do this. It starts with a ground movement. It begins with a small group, setting goals, defining attack strategies. It succeeds with the accumulation of cash to fight back. There are 250,000,000 of us. Divide by 2, multiply x $5.00 per month and you amass a strike fund of $600 Million per year. Think you can’t take back some companies with those dollars.

    The road to success begins with one step. How about it? Do you have the courage or would you like to wake up someday and find you are working for the Chinese? It’s already happened! They are building our bridges and stealing our contracts. Wake up!

       3 likes

  21. Rob says

    well an easy way to help keep money in the USA is to stop going to AMC theatres. They were bought out by Chinese company. For most of us it will be easy to find other theatres.

       1 likes

  22. Ken Thomas says

    The way to get manufacturing going again in the US is to start at the grass roots level. At the consumer level, allow US manufactured merchandise to be sold sales tax free if purchased by US citizens. Then watch the demand for US made products soar. The demand by consumers for US made products will cause demand by retailers to find them to sell. It would be both patriotic and as well put people to work across the country. The cost of the government losing the sales tax would be far less the the cost to the government to look after the people out of work. Simple plan, no tax when you buy US. It’s time to take back the manufacturing from China and other foreign countries. If this is not done the US is certain to fail along with Canada and Mexico.

       3 likes

  23. Harv Dykstra says

    Fiscal Cliff? A big part of the problem is excessive government spending. Another part is a lack of revenue which causes the administration to look at raising income taxes.
    Nobody is discussing the alternative: Tax China’s imports to us until they play fair. There will surely be some short-term pain for some US companies that rely on these imports. However, no matter what choice we make, we will have pain and it appears to me that America desperately needs to export more without devaluing our currency to do so. This would require taxing China to ensure they fairly value their currency putting us on a more level playing field. If we tax China now, we can take some short-term pain for a brighter future all while paying off debt and not increasing taxes on our own people.
    The question is how quickly will China change its tune if we stand up for ourselves?

       0 likes

  24. kathryn d says

    I have been thinking along these lines, but you have said it very well. I’m Canadian, and my husband is Australian. Both of our countries need to do this too..along with USA. Countries need to be as self sufficient as possible. When they start allowing other countries to make fire arms/spare parts, currency, and technological products, it is a very slippery slope.
    I have worked many years in a factory. So many people have no idea what they are like, and basically fear them. Our countries need to bring the production and telemarketer/technical support jobs back to our countries.
    Welfare is far too bloated with able bodied people who claim to be disabled, or state they cannot find a job. Everyone can do something.If someone doesn’t want to work in the factory, let them provide childcare for the others.
    Medical care needs to be addressed.Countries like Canada and Australia pay higher taxes, and maybe US can start easing that way.
    Far too much government involvement. Instead of handing out more money to everyone, start checking for fraud. Throwing money at a problem only makes it worse. Find the root of it, and fix it.
    If it took 10 years to get thru this transition period, and get thru the other side with healthier countries, I’d be the first to put my hand up.
    So many items end up in the trash which can be recycled, I’m sure most of us could go 10 years without needing to buy too many “dishes”. Until new factories could be built you’d see a whole host of new stores and services pop up. Consignment stores for clothes,household goods. Appliance repair and maintenance people. Glass, plastic, metal recyclers for production of reclaimed material.Tailors and clothing alterations/repairs.
    So much food is never even harvested (approx 40%) because it is not pretty, too small / large or because it didn’t have workers to harvest it. This food can certainly be used for something, such as dehydrated foods,canned,institutional cafeterias etc. With this much food, there shouldn’t be much of an increase in prices. If we need to go back to rations, well our countries did it once, we can do it again.
    We did do this to ourselves. We all wanted things cheaper. Has the cost become too high? We are keeping other countries citizens employed, instead of our own.
    I don’t think voluntarily boycotting is enough. Governments need to get on board. It’s not too late, but it is getting awfully close.

       0 likes

  25. Russ IRish says

    I am in favor of boycotting Chinese imports, wholeheartedly !
    In fact, I would take it one step further by boycotting any and all imports, for we have the capacity to manufacture any and all things need.
    Buy USA only, and promote manufacturing in the US !

       0 likes

  26. Cheryl M says

    Having access to an abundance of cheap, poorly-made Chinese JUNK does not make poor American richer – having an American JOB does! I, for one, will not buy ANYTHING made in China – most especially, foodstuffs, which for the most part are poison. Boycotting Chinese goods should become a global movement!

       0 likes

  27. HIPSTER says

    I for one believe in closing the borders for 2 years and sending back all who are here on a visa or illegally. The countries that the illegal immigrants came from should have to flip the bill for them to go back to which they came from.
    This would in turn allow more real American’s (Born and Raised here in the US) the oppurtunity to have a good job not just a shitty one that pays minimum wages.
    Currently retireies are taking full time jobs that the youngsters get when on summer break or Chiristmas break for extra money. These full timers are getting paid stupid low wages and barely make ends meet now even if they are getting S.S as well.
    I know this is a harsh response but when do we call it quits with the immigration that is destroying America.

    What have they done for us lately?

    Foreigners come and take jobs that Americans would have and then send money home to wherever they are from and the US will never see this cash flow through the retailers at all now becasue it’s gone and not being spent here.
    I don’t want to here about “well Americans are lazy and don’t want the low paying jobs”
    Really, then why are we accepting them if we don’t want them. It’s the retialers and shop owners that don’t want to pay the workers what they are worth.
    Any business that get’s caught hiring illegal immigrants shuld be shut down for a week for a first infraction and a month on the second and if there is a third you don’t get another chance your out of business for good with a $50,000 fine on top of it.
    How about that for keeping people honest.

       0 likes

  28. HIPSTER says

    Let’s put this another way.
    Do we the people truely believe there are not enough of us here currently to have childern to make up for the loss of immigration that was needed once upon a time but not any longer now we need to slow the rate of imports goods as well as the immigration of people that have no skill set and just want a hand out.
    If you are a doctor of medicine or a very wealthy person that would change the thought process a litle as it would put money in our banking systems and in the long run we would have a much tighter knit society without so much hostility about why America grants immigrants the right to many things that Americans are not.
    When was the last time you were offered no taxes on your business for 7 years after opening just to make sure you have a good head start. Answer that when? Never is my guess and it would be a cold day in hell if you will ever see this as an American born and raised.
    Big brother seems to think that we have the upper hand becasue we were born here but now we are becoming the minority to the immigration.

    No hand outs here anymore, try another country.

    Thank you please drive through.

       0 likes

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