This is Why the Trade Deficit with China Exists

OLYMPUS DIGITAL CAMERAAchieving a productive supply chain is a delicate balance. Utilizing the best ocean freight shipping rates can help lower some costs. However, it seems that beyond transportation, a great way to lower supply chain expenses can be found on the manufacturing side of the equation. Many companies enlist in the help of a contract manufacturer to produce their goods.

While some companies can get their products made in the US, and in turn lower their transportation costs, it seems that this can be a problem. When it comes to contract manufacturers, China is simply the best. Companies that wish to find a contract manufacturer always look to China because there are specialist manufacturers who produce all types of goods. That is why China’s contract manufacturers receive a lot of business from the US.

Why not just find a contract manufacturer in the US? Simple answer: there are very few.

In essence, the US lacks contract manufacturers for consumer products, especially goods produced at a higher volume and scale. A great example is with the electronics field, where the best contract manufacturers are almost all in China. As result of the contract manufacturer imbalance is the growing trade imbalance in China, as about 50% of consumer goods contribute to the over $700 billion US-China trade deficit.

An increase in US contract manufacturing would create jobs and stimulate economic growth. Investments in US factories would have to grow in order to compete with China.

Meanwhile, companies that hire a contract manufacturer in China can receive container shipping help from a trusted freight forwarder.

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