The World Trade Revolution
To see how the world will eventually right today’s massive trade imbalances, look to the Atlantic, not the Pacific.
Last year, two of the most powerful corporations in the United States reversed a decades-long trend of sending money and jobs to low-wage factories overseas and announced that they would be investing up to $10 billion in manufacturing goods at home.
Two-thirds of that investment is to be made by Intel Corporation, which will be upgrading its existing plants and building a new chip fabrication facility in Oregon. That might have been expected. While Intel makes more than 70 percent of its sales overseas, it has traditionally kept three-quarters of its manufacturing in the United States. But the other announcement, by General Electric, was a surprise. Its investments, more than $400 million on top of some $600 million made during the past two years, will go toward building new manufacturing plants for household appliances such as refrigerators, freezers, and washing machines. These are traditionally the kinds of mass-market, low-technology products that can be produced more cheaply in China and imported back into the United States.
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Martin Walker, a senior scholar at the Woodrow Wilson Center, is senior director of A. T. Kearney’s Global Business Policy Council. Dark Vineyard, the latest novel in his best-selling series about a policeman in rural France, was published this summer by Knopf.more from this author >>