For the simulation I was part of the team representing Ford. Increasing globalization is an inevitable part of where the world is going. As Anneli discussed in her reflection last week, all policies that countries put in place and choices that individual consumers make work together to shape global demand trends which companies then work to supply. Given this, it is impossible to have strict isolationist policy that works to benefit only one country. The pro-nationalist, America-first rhetoric and policies supported by Ford and the President, though attractive on paper and politically sellable, fail to acknowledge the dependencies that exist in international business and international relations. While they may be profitable in the short-term and garner temporary political support, the inefficiencies in these policies will slowly be exposed, and that will eventually result in loss of support and loss of power for the current party.
The current economic policies put forth in the trade war is not realist in that they ignores the reality of globalization, it goes against the basic principles of economic liberalism (using trade as a way to strengthen relationships between countries), and it is not constructivist in that it fails to holistically account for varied economic interests within the US and worldwide. In other words, our current economic policy is ridiculous, unfounded, and unsustainable. In this America-first trade war aimed at making American goods more competitive it is American companies and American workers that are hit the hardest. With this trade war, the US has knocked out a lot of competition from China and other countries, but now has nowhere to sell to, making the “competitive advantage” moot anyway. As was brought up by the consumer group and foreign auto workers during presentations, the US is a leading car manufacturer, but we are not the leading car purchaser. Strengthening domestic content laws would make US companies like Ford more competitive in the US, but they would end up unable to sell and losing money in foreign markets (where the majority of sales occur anyway) leading to a net loss in profits. This decreased demand would eventually lead to less jobs in the US from Ford and other companies, in addition to the expected layoffs from foreign companies leaving the US. The current system of 50% domestic content to be considered “Made in America” is not perfect, but I think it is sustainable for now and shouldn’t be tampered with. The US domestic auto market is already relatively strong (it’s a Top 10 industry in employment and employs over a million Americans), and this is even given that the brunt of sales are done internationally. Of course companies always want to increase profit, but increasing the domestic content laws is not necessary for a market where the US is already a leading competitor. Staying as is preserves American jobs and profit, while increasing domestic content laws would eventually reduce both. Ideally US policymakers would reach this decision together, however given our current system of terms and term limits, US policy is often focused on immediate gain that looks good and is sellable to the public. Increasing American competition looks good; allowing foreign companies to continue working and expanding in the US does not. Given this, and as discussed by Dean Jackson when he made the policy decision during the simulation, the inevitable future is the US government increasing content laws now and the working class paying the economic price later.
1 Comment
|
KateHi, I'm Kate! I'm from Madison, WI and am planning on majoring in SIS focusing on East-Asia China. I like practicing kung fu, listening to music, and drinking bubble tea. Archives
December 2018
Categories
All
|