Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Obama: 'It's very hard to ship windows from China'
President Obama is aware of the fact that his decision to stimulate the American economy without closing the trade deficit leak is producing jobs in China, not the United States. Even ABC News is onto this story. (See this report.)
In remarks on March 2 at Savannah Technical College, President Obama claimed that his "Homestar" program would subsidize American production because the products involved, including energy-efficient windows, will mostly be produced in the United States:
Now, many of you have heard of "Energy Star" -- how many people have heard of "Energy Star"? You've seen that "Energy Star" sticker on a computer or on a microwave? The Energy Star program was created to promote energy efficiency by letting consumers know which appliances, which electronics would save electricity and, therefore, would save them money over time. The program I'm describing today applies this concept not to the appliances, but to the home itself -- and it takes it further. So we're going to call it "Homestar," just to make it easy to remember. (Applause.)
Here's how it would work. We'd identify the kinds of building supplies and systems that would save folks energy over time. And here's one of the best things about energy efficiency -- it turns out that energy-efficient windows or insulation, those things are products that are almost exclusively manufactured right here in the United States of America. (Applause.) It's very hard to ship windows from China. (Laughter.) So a lot of these materials are made right here in America.
So I did a google search and I found several listings for Chinese glass producers, including the following at made-in-china.com:
President Obama may be correct that, at present, most energy-efficient glass is made in the United States. But, unless he finally begins to combat Chinese mercantilism, it is only a matter of time until it is produced in China. There are two theories of trade:
1. Comparative Advantage. We make the products that we produce with comparative efficiency and trade them to China for the products which they produce with comparative efficiency. This theory requires balanced trade and leads to economic growth in both countries.
2. Mercantilist Advantage. China makes the products that we produce with comparative efficiency as well as the products that they produce with comparative efficiency and trades both to us in return for our assets and IOUs. This theory leads to growth in the mercantilist country and debt in the victim country.
Chinese-American trade is based upon the theory of Mercantilist Advantage.
Comment by D. Partridge, 3/4/2010:
Importing glass from China isn't "very difficult" - according to the government's own data, over $70 million of flat glass alone was imported in 2009, and it was over $120 million in 2008. That doesn't include all the mirror, pattern glass, and finished windows that ere imported.
Comment by Larry, 3/6/2010:
It is extremely difficult to compete with state-sponsored industry on what has become (unfortunately) a commodity item. At least 2 glass manufacturers in China have developed or are currently developing coated glass products that can perform in the energy-efficient manner described above.
The Chinese have made dramatic investments in float-glass capacity and are selling to the fabricator market at prices below domestically produced cost.
So while it is true that the final assembly, fabrication, customization etc are still being done primarily here, the raw material 'A' items are all imported and you are essentially only marking up labor... How long do you think the Chinese will be satisfied missing out on the profitable market segment?
Comment by john, 3/28/2010:
we are glass plant from China,we are professional manufacturer and exporter of glass,we have do glass export for more than 15 years, our glass have been export to more than 30 countries.
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