Last week, I wrote a column taking off from an excellent article in the Wall Street Journal that said rather than ushering in a manufacturing golden age, as promised, the Trump tariffs and other dynamics have US a manufacturers on the defensive, with most key metrics headed in the wrong direction. (See The State of US Manufacturing – not Good.)
Gilmore Says.... |
 |
Do we need to offer some forms of protectionism even for US companies competing against Chinese firms operating here?
|
 |
What do you say? |
|
| Click here to send us your comments |
| |
|
|
|
I don’t know if was planned this way, but nicely this week the Journal published a bookend article on the challenges of US factories competing not with low-cost goods made in China, but from Chinese-owned plants producing right here in the US.
And it mostly told the tale of a Chinese factory well-known to me: the Fuyao Glass America Moraine plant just south of Dayton, OH, a maker of windshields and other glass products to automobile makers in the US, operating maybe 10 miles from my home.
It is also operating in a portion of what was a sprawling GM truck factory closed more than a decade ago and the subject for a powerful documentary “The Last Truck: the Closing of a GM Plant” in 2009.
It is well worth watching.
The article, by the Journal’s Gavin Blade, starts with powerful opening: “President Trump has pressured trading partners for investment in US manufacturing plants. What if local industries can’t compete?”
What indeed.
Ask the folks at Vitro, a US glass maker who say competition from Fuyao is threatening about 250 jobs at its glass factory operating in Ohio since the 1950s. Vitro tells the Journal it has spent the past year considering whether to shut down.
Since 2019, Vitro has shut three other auto-glass plants in Pennsylvania, Michigan and Indiana—decisions the company attributes in large part to Chinese competition.
What is Fuyao’s secret? Some say its success is based on breaking the rules. Rivals say they can’t match Fuyao’s lower prices and allege the company employs unfair business and labor practices.
Then there is this: The Journal reports that Vitro’s concerns reached Washington after federal authorities conducted a raid on the Fuyao plant in 2024. The US alleges that Chinese business owners formed a web of dozens of commercial enterprises in Ohio to “facilitate the harboring, transportation, and employment of illegal aliens at various factories,” including Fuyao, which allegedly funneled $126 million to companies in the scheme, according to a civil forfeiture complaint filed by federal authorities last year in US District Court. No one has been criminally charged in the case.
In other words, a supply chain conspiracy.
In response to some of the allegations, Fuyao spokeswoman Stella Zhang told the Journal that ‘In any industry, long-term success cannot be achieved by price alone. Our prices are reasonable, and customers choose Fuyao based on a comprehensive evaluation of technological expertise, product quality, delivery reliability, and service excellence.”
The company said its Moraine plant employs more than 3,000 workers—most of them from the area—and is expanding.
 The Journal writes that Vitro and its Washington allies warn Fuyao’s success reflects a way China might try to hollow out American manufacturing capacity and undermine critical industries, the way it has already done with goods made in China. To this end, some say Chinese some companies operating factories in the US receive subsidies from Beijing that they often used to keep prices low.
Critics also note that Chinese companies can evade tariffs by moving production to the US using low prices to undercut manufacturers in America, a practice known as internal dumping. These companies trounce competitors with a combination of production efficiencies and, allegedly, illegal labor practices.
“The Chinese government is systematically weakening our economy from within our own borders,” Nazak Nikakhtar, a former Commerce Department official in Trump’s first term who oversaw efforts to confront China, told the Journal.
President Trump has said that despite trade tensions with Beijing, he welcomes new investment in the US by Chinese companies, even in the automotive sector, which he has used tariffs to protect.
There’s more to the story than this, but this was the gist of it.
Do we need to offer some forms of protectionism even for US companies competing against Chinese firms operating here?
I certainly hope not.
Is China conspiring to use illegal low-cost labor to now hollow out US domestic manufacturing, repeating what it has already done from offshore?
Not sure. But I will keep close tabs on the legal action as it proceeds.
What is your reaction to this article? Let us know your thought at the Feedback section below:
Comments/Feedback
|
