'You prepare for war': how one U.S. firm tried escaping Trump's China tariffs
Account of the 'trade wars' impact on China, through the eyes of Sloven a supply-chain outsourcer vetern. A survey by AmCham shows that a third of American firms are considering shifting some production outside of China. Sloven thinks Chinese firms lack the expertise to find new markets and are just waiting the trade war out. The trade war devestated Sloven's company (electronics), revenue decreased from ~$37 million to $13 million.
When the 'trade war' began Sloven actively started moving production to Thailand - if 35% of the product is assembled in Thailand American tariffs don't apply. Sloven was already considering moving production to Thailand because of raising labor costs in China (he started his career outsourcing from Japan). American ambassadors also help Sloven find local contacts in Thailand.
However, shipping times from Thailand to the US is a week longer than from China. You also have to certify that the goods are made in Thailand (which is expensive). You also have to certify that Thai manafacturers meet certain labor standards. The biggest challenges though seemed to be convincing Chinese suppliers to ship to Thailand (vs waiting the tradewar out). And ensuring that the Thais had the expertise to make "smart furniture." The Thai mfgs agreed to bear the cost of retooling their factories.
Overall, I wonder if China has already leapfrogged past the point where it needs to rely on cheap labor and manufacturing for its economy. Maybe the trade war is devastating for the private profits of the factory owners (and the huge number of laborers left behind). But enough the economy is already at the next stage of development that it doesn't matter.
From the Wests pov I wonder if maybe the relevant historic analogy is "King Cotton." 75% of world cotton (?) was made in the South and there were huge fears about over-reliance on the South (and its slave-system) in manufacturing centers. But during the Civil War there was a couple of years of deep recession but production quickly shifted to Egypt and India and the shift in actual supply wasn't huge is my understanding.