January 16, 2017 at 3:35 pm #26267Andy BrownParticipant
HOLLAND, Mich. — While much of the American political class has been consumed with recriminations over the wrenching loss of manufacturing jobs, Chuck Reid has been quietly adding them.
His company, First Class Seating, makes recliner seats for movie theaters here at a factory on the shores of Lake Michigan. Since he bought the business three years ago, its work force has grown to 40 from 15.
But those jobs will be in jeopardy if President-elect Donald J. Trump follows through on his combative promises to punish countries he deems guilty of unfair trade.
Mr. Trump secured the White House in part by vowing to bring manufacturing jobs back to American shores. The president-elect has fixed on China as a symbol of nefarious trade practices while threatening to slap 45 percent punitive tariffs on Chinese imports.
But many existing American manufacturing jobs depend heavily on access to a broad array of goods drawn from a global supply chain — fabrics, chemicals, electronics and other parts. Many of them come from China. At Mr. Reid’s factory, imports account for roughly two-thirds of the cost of making a recliner chair.
In short, Mr. Trump’s signature trade promise, one ostensibly aimed at protecting American jobs, may well deliver the reverse: It risks making successful American manufacturers more vulnerable by raising their costs. It would unleash havoc on the global supply chain, prompting some multinationals to leave the United States and shift manufacturing to countries where they can be assured of buying components at the lowest prices.
“If you do this tomorrow, you would have a lot of disruption,” said Susan Helper, an economist at the Weatherhead School of Management at Case Western Reserve University in Cleveland. “The stuff that China now makes and the way they make it, it’s not trivial to replicate that.”
Mr. Reid takes pride in using American products. His designers here in Michigan dreamed up his sleek recliner. Local hands construct the frames using American-made steel, then affix molded foam from a factory in nearby Grand Rapids. They staple upholstery to hunks of wood harvested by timber operations in Wisconsin. They do all this inside a former heating and cooling equipment factory that shut down a decade ago when the work shifted to Mexico.
But the fabric for Mr. Reid’s seats arrives from China. So do the electronics in the “magic box” that enables moviegoers to control the recliner. Ditto, the plastic cup holders and the bolts and screws that hold the parts together. The motor is the work of a German company that makes it in Hungary, almost certainly using electronics from China.
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