Back And Forth On Globalization

One key theme is Donald Trump’s presidential campaign could be summarized — using one of Trump’s favorite adjectives — as “disastrous trade deals.”

Basically, Trump argues that, for decades, American leaders have been taken to the cleaners by foreign counterparts and have negotiated trade pacts that have cost countless American jobs, as cheap goods manufactured overseas have flooded the United States while companies have moved their operations to countries where products can be built more cheaply.  It’s a theme that Trump sounds whenever he comes to the industrial Midwest and can stand in front of an abandoned factory.

30501Today the Washington Post has an article that adds a bit of nuance to the globalization debate.  It’s about a Chinese billionaire named Cho Tak Wong who has bought a former GM factory in Moraine, Ohio to manufacture automotive glass.  Moraine is one of those “rust belt” communities that have been devastated by the departure of good-paying, steady blue collar jobs that used to be a staple of the Ohio economy, and local officials are hoping the factory will help to reverse that trend.  The Post reports that the purchase is part of a shift in globalization fortunes, as wealthy Chinese businessmen look to parlay their profits in China into purchases of American businesses.

Nothing is ever as simple as a presidential candidate presents it, and trade certainly falls into that category.  And blaming “trade deals” doesn’t recognize the impact that other decisions — like laws imposing increasing wage and benefit obligations on employers, or the ongoing pressure from the American consumer for products at cheaper costs — have had on the exodus of American jobs to places where labor and benefit costs are substantially cheaper.  You can argue the merits of “globalization,” but the reality is that we are in a global economy whether we like it or not.  It will be interesting to see whether what’s happening in Moraine, and elsewhere, will ultimately shift the debate.