For a long time, the US trade policies have systematically affected the growth of its domestic manufacturing industries, what are some of the measures taken by the US government restore its manufacturing industries.
Fairtrade is a type of business whose objective is to offer a better deal to all the food and other commodity producers in the world. In other words, fair trade refers to a trading system that that obliges all its stakeholders to comply with the specific standards and giving monetary benefits to raise the living standards and the income of the producers. Recently, the US government free trade within its boundaries and with its trading partners all over the world to promote the growth of the U.S domestic products. The Trump administration has adopted many initiatives such as taking stringent stern measures against countries which involve in unfair trade practices. This has been done to promote free trade.
The U.S government administration has initiated the move to increase its prioritization for trade enforcement within the country. Trading fraud is one of the unacceptable trading practices that has contributed to the decline of the U.S domestic manufacturing companies such as textile, and this is because the fraudulent companies avoid paying for the duties, thus, enabling them to sell their products at relatively lower prices as compared to the local products. To reduce the cases of customs fraud, the US government has allocated a lot of its resources in investigating the companies that are involved in the business fraud with the intentions of having an advantage over the local companies. Additionally, heavy penalties have been established to help in cautioning companies against involving in trade frauds.
The US government has also settled on the Congress decided to review the existing tax policies in the country. The US Congress has made a move towards the decision to implement the new tax reforms in the country. It is expected that the new policies will help in lowering the corporate rates and providing favorable capital expensing and this will promote manufacturing investments in the United States. But since the new taxation policies will cut down the expected tax rates for companies, the local manufacturing companies in the U.S will be in a position to sell their products at affordable prices, and this will make them more competitive in the markets.
The U.S through president Trump has been designing drafts and comprehensive plans to rebuild the countries infrastructures. Infrastructural facilities within a state play essential roles in promoting the growth of industries. This is because infrastructural facilities such as roads act as links which join the company’s products to their market. Highways assist in the movement of raw materials in the companies for processing. By implementing the drafts and plans to rebuild the available infrastructures within America, the U.S. government, therefore, hopes to boost the productivity of its manufacturers and facilitate commercial activities in the country.
Another initiative adopted in the promotion of America’s manufacturers is through fostering the Innovative culture in the country. The American companies are being empowered by the government to increase their ability to innovate new products and new processes; this way, they will become more competitive in the market. Since most consumers are seeking for goods and services which addresses their needs, companies that have got high innovative power enjoys relative advantages over their competitors in the market. Through increased innovation, the U.S domestic companies will, therefore, enjoy more benefits in the market.
The majority of apparel products consumed locally in the U.S. originate from the overseas countries, why is America not producing enough clothes for its local consumption.
The emergence of large factories and textile mills in China and other developing nations in Latin America and Asia increased the competition in the apparel industry. In addition to the cheap labor and raw materials, the introduction of massive textile mills and factories in the overseas countries increased the capacity to manufacture huge orders of cloths within a short time. Consequently, this transcended into a decline in the price of apparels from such countries, thus, making the American companies less viable due to the massive cost of production. Most Americans began opting for the cheaply imported cloths at the expense of the domestically manufactured fabrics.
The implementation of the trade liberalization policies which began in the 1990s phased out most of the trade restrictions and duties on foreign apparel products. Through the free trade policies such as the North American, Free Trade Agreement abolished all the limitation on the foreign goods into the U.S, thus allowing the huge textile companies in the overseas countries to export their surplus products into the US markets. The trade liberalization policies also encouraged the American apparel retailers to begin seeking for cheap supplies from the Global South to meet their manufacturing demands. Consequently, the U.S. apparel products which were deemed to be more expensive began suffering from a declining market, thus, leading to the collapse of many US textile companies.
The American Apparel companies are lacking adequate skilled labor that can meet the current needs in the market. The overseas textile companies are more vibrant with more talents regarding specific types of production. It has become difficult to find the right experts in the U.S textile industry as most people have shifted to the other sectors, thus, leaving the textile industry in the U.S. with few skilled personnel’s who cannot produce sufficient clothes to meet the local demand. Moreover, the U.S. companies are less willing to adopt the new changes in the industry. For example, few companies are eager to invest in new machines which can meet the current requirement. Lack of skilled labor is, therefore, a contributing factor to the decline of the U.S apparel industry.
The American apparel companies are driven by the need to meet high-quality standards and not production level. Most of the U.S. apparel companies are governed by policies which direct towards the production of great garment qualities and not high quantities. Since a considerable amount of time is required to produce more top quality garments, America’s apparel companies register low production level, and hence they are not able to meet the domestic demand. Moreover, the production of higher quality garments consumes more resources, thus, contributing to the expensive nature of the US made garments. In contrary, the overseas companies are driven by the need to produce higher quantities to meet their market demands. Besides, the presence of raw materials and cheap labor in foreign countries enables them to deliver higher volumes of garments which sell at relatively lower prices in the U.S market. The high-quality orientation of the U.S. garment companies has, therefore, necessitated a decline in the production of cloths in the country, thus promoting the existence of different apparel products in the U.S.