According to the Toronto Star, for every Apple iPad sold in the United States, the U.S. trade deficit with China increases by about $275 (U.S.). Yet by far the most value embedded in the device accrues to Apple and sustains thousands of well-paid design, software, management and marketing jobs in the United States.
Viewed through this prism, offshore manufacturing of electronic products like the iPad is a solution, not a problem, for the United States, and seeking to punish China for its purportedly undervalued exchange rate is a mistake.
“Without China, Apple couldn’t be so successful and Apple products wouldn’t be so affordable,” said Yao Shujie, professor of economics at the University of Nottingham in England.
In the case of the iPad, China is the final assembly point for components imported from a host of countries, including South Korea, Japan, Taiwan, the European Union and the United States itself. There are no Chinese suppliers for the iPad.
“China is sitting in the middle: It’s processing goods for rich countries,” said Yao. As such, he argued, it would be more accurate to allocate most of China’s bilateral “iPad trade surplus” to those supplier countries.
Trade data can mislead as much as inform…
Find out more at http://www.thestar.com/business/companies/article/1069247--punishing-china-no-boon-for-u-s-manufacturing-jobs
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