Lin Min

linmin67@126.com

U.S. lawmakers were customarily “outraged” after media reports revealed that the U.S. Olympic team’s opening ceremony outfits carry “Made in China” labels.

Senate Majority Leader Harry Reid even went as far as to demand that the outfits be burned. Six Democratic senators said they plan to introduce legislation requiring the ceremonial uniforms to be produced in the United States. The bickering is expected as both major U.S. political parties are trying to win over voters by taking issue with “Made in China” uniforms and U.S. overseas outsourcing at large at a time when the presidential election campaign gains traction.

The “outrage” is also understandable if the U.S. lawmakers just want to display their national pride and “political correctness.” But if this political row becomes a new driving force for trade protectionism, it will bode ill for Sino-U.S. trade and there is little hope the United States will benefit from trade friction with China. U.S. Senator Sherrod Brown is trying to make law to strengthen “Buy America” provisions for federal tax dollars. Such an effort, along with other political maneuvers and rhetoric over lost U.S. jobs, apparently has attracted big audiences in a country troubled by anemic economic growth. But misinformed accusations and prejudice will not save the U.S. economy.

There are various reasons for the high U.S. unemployment, which remains at around 8.2 percent. But U.S. politicians should face the reality that curbing imports from China does not effectively bring jobs back to the United States. U.S. research has also found that attempting to save jobs by imposing punitive duties on Chinese goods is expensive and ineffective.

In analyzing U.S. jobs saved by shutting off imports of Chinese tires, Gary Hufbauer and Sean Lowry of the Peterson Institute for International Economics found the U.S. “victory” came with a high cost: at least US$936,000 for each job saved.

While accepting President Barack Obama’s claim that the tire action against China saved 1,200 U.S. jobs, the analysts found Americans spent US$1.12 billion more than they otherwise would have on tires. That is nearly US$1 million for each job saved, virtually a punitive tax on U.S. consumers.

Apple Inc. CEO Tim Cook has a profound understanding of why overseas outsourcing makes sense for America. In explaining why Apple outsources much of its manufacturing to China, Cook said in May: “We decided a decade ago there were things Apple could do best and that there were other things that somebody else can do as well or better. Manufacturing was one of those. I think that’s still true.”

Cook’s comment is to the point, however, he did not mention another important reason. A study by researchers at University of California, Berkeley, last year said Apple Inc. raked in profits of 58.5 percent from iPhones and 30 percent from iPads, while the profits for the products’ contract manufacturer Foxconn were a meager 0.5 percent for iPhones and 2 percent for iPads. Other reports said Chinese workers received only 1.8 percent of iPhone’s profits. Apparently if iPhones and iPads were manufactured in America, their costs would be much higher, thus either making these products forbiddingly expensive or leaving Apple with little or no profits.

The breakdown of profits for Apple products illustrates how globalization and outsourcing benefit U.S. companies. Many other products also show meager profits for China but fat margins for U.S. importers. Contrary to accusations by U.S. politicians, Made-in-China labels do not mean the loss of U.S. interest to China. By blaming Chinese imports for U.S. unemployment, politicians are just misleading the U.S. public.

To create jobs, America has to restructure its economy, although maybe in a different way from China, which is also in dire need of restructuring to make its economy less dependent on exports and more driven by domestic consumption.

American firm Ralph Lauren, a sponsor of the privately funded U.S. Olympic Team, may share the same thinking with Apple when outsourcing the Olympic outfits to China. These outfits proudly feature the home page of Ralph Lauren’s Web site even after the controversies.

U.S. athletes also seem to be more open and inclusive than bellicose lawmakers. Track and field Olympian Nick Symmonds tweeted: “Our Ralph Lauren outfits for the Olympic opening ceremonies were made in China. So, um, thanks China.”

(The author is editor of the Shenzhen Daily News Desk.)