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I'd call it the opening salvo in a trade war, if not a new cold war. Expect to see a lot of political pressure for other companies to 'follow Google' and repatriate manufacturing operations and the like.



Our economy cannot function without cheap imports.


Fix Mexico (legalize it)


I've never understood why America outsources so much half way around the planet for cheap labor when it is available on her doorstep - a short flight, easy transport, same time zone , reasonably stable, friendly democracy ... what's not to like?


Sending manufacturing to China and other SE Asian countries is far cheaper than even Mexican labor. While 1 day's wages of a median Mexican assembly worker is less than 1 hour of a median domestic US assembly worker's wages; 1 day's wages of a median Chinese assembly worker is cheaper than 1 hour of the media Mexican worker.

There were some articles last year (or maybe it was 2008) about textile manufacturing in the US, and how the Chinese were subsidizing them to the point where even if the US workers worked for free, the US plants could not compete on price.

To understand how much manufacturing changed, I recommend reading The Box. The shipping container totally changed everything by reducing shipping costs by about 98%. A lot of cities that used to be manufacturing centers (such as NYC and Detroit) withered, and a lot of cities that used to be shipping centers (such as NYC and London) also shriveled up because they could not support container traffic.

http://www.amazon.com/Box-Shipping-Container-Smaller-Economy...


I can't find hard numbers on China's violent crime rate, but Mexico is around #6 per-capita in the WORLD. Might have something to do with it...


False, people will just have to buy less stuff.


So what would all of the people involved in the design, sale and distribution of that stuff do? Then what happens when the recently unemployed are put on welfare and stop paying income taxes? And what happens when raising taxes to compensate for the diminished tax base makes more thing unaffordable, further reducing spending... not to mention the questions about what happens when debts issued on the premise of growth go bad.

It is a cascading failure.




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