Comments by "Carey\x27s Corner" (@careylymanjones) on "Zeihan on Geopolitics"
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@yzy8638 The only thing keeping China afloat is the sunk cost of the existing factories there. But if a large enough cost savings is available, companies will move. It happened to the US, decades ago. It's beginning to happen to China.
There are Chinese companies building factories in Mexico, now. Cheaper labor, cheaper and more reliable energy, lower transportation costs, lower tariffs. The smart companies have already run to Mexico, with Columbia picking up the really low-end stuff.
Globalists gonna globalize. They have no country. The mere place they stand means nothing to them, compared to where they make their money. And WHEN , not if, they decide they'll make more money in India or Mexico, it's sayonara, Xi.
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Offshore supply chains will not completely disappear. They'll just become regionalized. America will look to countries closer to home, such as Mexico and Columbia, instead of China. And there will still be "friends and family" that still get to play with us. Japan and South Korea have both made trade deals with us, as has Australia. Vietnam and Thailand will still do business with us. The big loser will be China. Nobody LIKES China, and as Chinese labor becomes less competitive, companies will abandon it, for places such as India and Mexico, particularly Mexico.
That being said, I think the US will do well. In spite of FJB's War on Fossil Fuels, America has some of the cheapest energy in the world, it's the world's largest consumer market, and foreign companies will increasingly pay for the privilege of trading with us. We'll move our supply chains closer to home, reducing transport costs and security issues. As the US withdraws as the world's policeman, everyone's supply chains will become more regional, as no one else has the navy to protect global trade.
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