Trump's push for jobs should not be at the cost of killing jobs in developing countries

By Song Shengxia Source:Global Times Published: 2017/1/11 0:13:39

The US' effort to create more jobs at home should not be done at the cost of killing jobs in developing countries such as China and Mexico. Taking back manufacturing jobs from developing countries will not improve US employment but instead will harm the growth of developing nations and backfire on its own economy. The US should work with China and Mexico to create opportunities that are reciprocal, otherwise the US' global leadership will wobble.

On Monday, Alibaba Executive Chairman Jack Ma Yun met US President-elect Donald Trump to discuss a plan to attract 1 million small US businesses to the Chinese e-commerce giant's online markets to sell goods to Chinese consumers over the next five years. The move has a great potential to generate growth and create jobs for the US. But whether the plan can materialize depends on how much the US can ease its restrictions on Chinese firms and accommodate cross-border transactions between US sellers and Chinese consumers.

During and after his campaign, Trump has targeted China and Mexico, blaming the two for US job losses. His campaign rhetoric seemed to turn real after his border tax threat led to US carmaker Ford withdrawing its plan to build a plant in Mexico. However, Trump's plan to bring manufacturing jobs back home is by no means a cure for the country's economic problems. While his plan may create some manufacturing jobs, it will also kill others. For US companies that have relied on the global supply chain for raw materials and assembled products, of which China and Mexico are a major part, raising tariffs will increase costs for US firms, which will either be passed on as higher costs for US consumers or will push companies toward automation and the cutting of jobs. If US businesses choose not to outsource from low-cost countries, it will take years to build a supply chain at home.

Further, as China is the No.1 trade partner with the US and Mexico, No.3, their economies are closely tied together. If their economies suffer, the US' economy will not remain immune to their woes.

Washington should realize that making life for developing countries tougher won't benefit the US, but will rather get the country in trouble eventually. Instead of competing for low-value and labor intensive jobs, the US should work with developing countries to create jobs for the future. 

Alibaba's new deal that will allow US small businesses to reach Chinese customers through its online platforms may serve as a fresh breakthrough of forging a win-win partnership.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: EYE ON THE ECONOMY

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