‘Re-shoring’ & ‘Friend Shoring’ are bound to cost as new arrangements are made; but will this cost increase ease as the new supply chains settle in? Further, China’s wholesale selling prices are likely to rise over time. Interesting that European nations are staying with China.
Indeed the higher sourcing cost will increase final sale prices, and so inflation. The trade off is whether improved security of supply is worth the cost. The benefit is that China is less able to blackmail the Western & South Asian democracies. Remember: PM Cameron & Chancellor George Osborne disgraceful crawled (toadied) to China, while Huawei and recently disclosed Chinese ‘espionage’ highlighted the weakness of reliance on China.
For context, Mr Trump’s threatened tariffs will cost us far more, as will the cost of intra-European trade post Leave EU. The impending increase in taxation (eg NIC) will damage the British economy more. I have no idea of the relevant merits but suspect he will have done us a favour.
JK’s arguments are correct, but there are times when shaving off some GDP is worth it. Mr Trump is a maverick and we may disapprove of some of his policy and (more) his reckless inconsistency, but it could turn out to be the right decision.
An informative review, JK.
‘Re-shoring’ & ‘Friend Shoring’ are bound to cost as new arrangements are made; but will this cost increase ease as the new supply chains settle in? Further, China’s wholesale selling prices are likely to rise over time. Interesting that European nations are staying with China.
Indeed the higher sourcing cost will increase final sale prices, and so inflation. The trade off is whether improved security of supply is worth the cost. The benefit is that China is less able to blackmail the Western & South Asian democracies. Remember: PM Cameron & Chancellor George Osborne disgraceful crawled (toadied) to China, while Huawei and recently disclosed Chinese ‘espionage’ highlighted the weakness of reliance on China.
For context, Mr Trump’s threatened tariffs will cost us far more, as will the cost of intra-European trade post Leave EU. The impending increase in taxation (eg NIC) will damage the British economy more. I have no idea of the relevant merits but suspect he will have done us a favour.
JK’s arguments are correct, but there are times when shaving off some GDP is worth it. Mr Trump is a maverick and we may disapprove of some of his policy and (more) his reckless inconsistency, but it could turn out to be the right decision.
there seems to be an opposing force with respect to excess global industrial capacity.
but perhaps the simple answer is that the lowest cost supplier will be selected within trade clusters, even if a much cheaper option exists elsewhere?
https://hoisington.com/pdf/HIM2024Q4NP.pdf