International Trade, Globalization and the U.S. Economy: Discussion Questions Proposed by FASH455 Students

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The following questions are from students in FASH455 (Spring 2017). Please feel free to leave your comments and engage in our online discussion. Please mention the question # in your comment.

#1 Based on the readings, how do you see the relationship between “Made in the USA” and international trade today?

#2 What is your evaluation of President Trump’s proposal to levy 45% punitive tariffs on Chinese imports? Will the proposal bring back more jobs to the United States?

#3 It is said that globalization creates both winners and losers. From the readings, why do you agree or disagree with the statement?

#4 One of Donald Trump’s main campaign points was that he was going to bring jobs back to America and push for companies to move their factories out of countries such as Mexico and China. What role can international trade play in this effort?

#5 As we mentioned in the class, international trade is more than a purely economic issue. So what are the other non-economic impacts of trade? Can you provide any specific examples from the readings?

#6 As a result of globalization and trade, nature of the labor market is quickly changing, which has led to many workers without a college degree lost their jobs. In a market economy like the United States, is the government responsible for reeducating these workers or does the government bear no major responsibility?

#7 Is creating jobs in the United States a major responsibility for U.S. companies like Apple and Nike in today’s global economy? Why or why not?

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Author: Sheng Lu

Professor @ University of Delaware

13 thoughts on “International Trade, Globalization and the U.S. Economy: Discussion Questions Proposed by FASH455 Students”

  1. #7 I don’t think it’s a major responsibility for companies like Apple and Nike to create jobs in the U.S. I think that all companies should have a corporate social responsibility and take responsibility for all their work done abroad, but should feel no obligation to create jobs in the U.S. The floodgates are already open to global outsourcing and they would not be making a rational choice to produce in the U.S. if their competitors are already taking advantage of the factories abroad. If they were to produce in the U.S. the price of their products would go up, and if the price goes too high customers will look for substitutes at other companies. If this continues, and consumers no longer demand the company’s goods at the increased price these companies will suffer and will start to decrease the number of the corporate American workers that they do have. Therefore, I agree with Apple in that creating the best product should be the main focus.

      1. #7 Is creating jobs in the United States a major responsibility for U.S. companies like Apple and Nike in today’s global economy? Why or why not?

        Creating jobs in the United States is absolutely not a major responsibility for companies such as Apple and Nike. If those companies wish too make that a part of their corporate responsibility then by all means, that is what they can strive for. But just because they were founded in the US that does not automatically make them prioritize US jobs over their own profitability. If these huge companies see a more profitable business in the future by taking advantage of globalization and outsourcing to other countries then that is what they are going to do. People should also understand that by these companies not taking advantage of outsourcing then the price of their products is inevitable going to rise because their production costs will be higher. They would also loose their competitive advantage against their competition who are taking advantage of sourcing from other countries and having the ability to sell their products at a cheaper price. One should also remember is that these companies are located in the United States, which means that they also pay a lot of money in taxes to the US government.

        If companies like Apple are not thinking about creating jobs in the US, then why would president Trump propose tax cut for U.S. corporations?

        President Trump, despite the fact that he says he does, doesn’t seem to have the best grasp on business. Proposing tax cuts would probably only benefit his high profile friends and acquaintances who said they support him, as well as his own businesses including the ones he has probably invested in. But if companies such as Apple and Nike are not wanting to create more jobs in the US, then the only gain the US government would get from having those business still in the US would be those taxes, not including the jobs they already offer to US citizens. It would be a great plus for those companies if they got a tax break, but the money would probably just go right into the hands of their executives and stockholders.

  2. Post the comment on behalf of emily_shea10

    #7 I don’t think directly it is Apple or Nike’s job to be creating jobs but I do think they can help the challenge of unemployment. Reading the article about Apple and seeing the many jobs that people got laid off from due to globalization was a little heartbreaking. The one man who had a pretty high position got laid off and then went from having enough and more money to take care of his family to working a job that only paid $10/hour is rough. Steve Jobs said to President Obama that if visa regulations were a little more lenient then the resources Apple is using could come over and teach a group of U.S. workers the types of work they would do and learn from that. This would be one way to create some jobs in this industry.

    However it’s understandable that all the jobs are being moved globally because no American is going to give the amount of commitment the workers in China give. No one unless extreme circumstances is going to live on site at their job. Work 12 hours a day and get told in the middle of the night that over 100 products need to be made and shipped within 24-48 hours. Americans have the freedom and choice that many people in developing countries don’t have. With that being said the American people are picky about where they want to work which I can understand. You study and get a degree in something that you believe you will do after graduation and then doing anything below that almost seems barbaric.

    In conclusion like I mentioned before it’s not Apple’s or Nike’s job to directly create jobs but if there was a way they could they should definitely try.

  3. #7 I think that US companies like Apple and Nike carry some responsibility in terms of creating jobs in the US, however it is not and should not be their main responsibility. As mentioned in the article, the technology industry has shifted to foreign countries. While Apple could produce in the US, it is not as profitable than it is being produced overseas. In terms of call centers for Apple, all of that work is still being done in the US, whereas for many other companies call centers have been moved overseas. In today’s global economy it is hard to resist the opportunities abroad and it would be foolish for companies to not take advantage of them. If Apple didn’t produce overseas, their profits would be less if they didn’t raise the prices of the products and if they did raise the prices to get a greater profit, then they may not sell as well because of the higher prices. As long as companies balance the opportunity cost of global opportunities and domestic, I think that is fair. It is up to the government to enforce US companies to create jobs in the US through different policies, acts, etc. because technically companies don’t owe the US people jobs, it just depends upon what the company values.

    1. Your comment is great! I have two follow-up questions if you don’t mind: 1) You said that “It is up to the government to enforce US companies to create jobs in the US through different policies, acts, etc.” Why should or shouldn’t the U.S. government do that? Any real examples as you read from the news? 2) Like you said that companies are always profit-driven. Then why do you agree or disagree that globalization makes workers more vulnerable?

      1. 1) I think the US government should enforce US companies to create jobs in the US through different policies, acts, etc., but to a certain extent. We have discussed in class the many ways President Donal Trump is trying to make it happen. For example, by stopping the TPP and NAFTA because he believes that US jobs have been taken by China and Mexico. However, stopping the TPP and NAFTA impacts more than just jobs. According to an article I read on Fortune.com many jobs have been taken by technology. The government could enforce companies to focus on employing people and not just replacing them by computers. 2) I agree that globalization makes workers more vulnerable because they have to compete with the jobs that are overseas. However, the jobs that are overseas tend to be jobs that wouldn’t be done in the US (low paying manufacturing jobs). Globalization may be an excuse for vulnerability, however I think technology is what makes workers more vulnerable because they are now being easily replaced be machines.

  4. #3 It is said that globalization creates both winners and losers. From the readings, why do you agree or disagree with the statement?

    When thinking about globalization, I do believe that there are certain countries that benefit more than others in certain aspects. Like the readings said, the fashion and technology industry has shifted to foreign countries for manufacturing. Many U.S. companies are looking to lower developed countries for cheaper, more fast paced work rather than manufacturing everything in America. When reading the Apple article, it opened my eyes to how many U.S. jobs are moving to China, Korea or Taiwan due to their ability to produce more for less in a short period of time. In this case, developing countries are the “winners” due to the increase of job opportunities offered by these U.S. companies searching for cheap work.

    The article specified that in China, they can hire 3,000 new employees with the skills needed overnight. In America, this would be unheard of. The problem is, no one is America is willing to work for the hours and wages offered in foreign countries. In this case, the U.S. are the “losers” in globalization, yet in many ways we are winners. These U.S. companies like Nike and Apple for example may have their products produced overseas, but for them it creates the highest profits and therefore they are the winners in the long run. Even though the products are made in foreign countries, Apple’s call centers are still here in the U.S. Along with this, everything that goes into these fashion stores such as design, transportation, packaging, and in-store work is still given to U.S. workers as shown in the Target article we read. So overall, although some aspects make us the “losers” in globalization and trade, there are high profits and still many jobs offered here in the U.S. making globalization worthwhile

    1. Excellent comment! Like you said that “no one is America is willing to work for the hours and wages offered in foreign countries.” This is how the issue of social responsibility and the so called “unfair trade practices” kicks in. We will explore these topics later in the course. As you see, trade and sourcing is never a purely economic issue.

  5. In reference to question #7

    My opinion is no, major companies do not have a responsibility to create jobs. There are many agencies that are around that have the main focus of finding work for the unemployed. There are many websites, such as Indeed.com, that can help companies recruit employees. Although companies like Apple and Nike are extremely influential, their main purpose is to provide their goods and services to their customers. Yes, since the companies are so big, they do have a huge number of employees, but employing them is not their main job. In the article “How the U.S. Lost Out On iPhone Work,” the authors explained to the audience how it is more beneficial for big companies like that to outsource. Outsourcing allows for the companies’ products to be produced at a cheaper and faster rate, than if they were produced in their home country. In doing this act, it is creating jobs in a different country, rather than where the companies are based.

    What the companies should be focusing on is producing their products at a high quality, while also being sustainable. Sustainability is a big factor in the fashion/textile world today. And, Nike is one of the brands that has sustainability as part of its core focus. For example, Nike repeatedly tries to reduce the waste from its factories, as well as using fabric dye that requires no water. Other companies should follow suit from Nike.

  6. #7 I think for companies such as Apple and Nike, it is not directly their responsibility to create jobs in the US, because we live in a globalized world, and companies need to do what is necessary to stay competitive in terms of pricing. This entails keeping their costs down, which typically means that labor will be sent overseas to countries such as China, Bangladesh, or even Mexico. Companies are responsible for the proper treatment and working conditions of their employees, and following trade regulations and proper policies. Although they should create and maintain jobs in the US, and I believe it is their goal to create jobs in the US, it is the direct responsibility of the government and indirectly the company’s responsibility, which is why Trump would propose a tax cut for US corporations to encourage jobs to stay in America.

  7. #3 It is said that globalization creates both winners and losers. From the readings, why do you agree or disagree with the statement?
    I believe that there are winners and losers when it comes to globalization. One reason why I do agree with this is because the less educated workers lose out on job opportunities. Globalization does favor the higher educated. Furthermore, while trading is meant to benefit both countries involved, there are other countries who are less developed, or do not have as large of a work force which are losing opportunities to grow.
    While there are winners and losers, some countries that appear to be the “losers”, for an example the US losing many manufacturing jobs to other countries with cheaper and a larger quantity of labor, they do win in other aspects. The US is able to benefit by being able to produce their products overseas, which is financially better for the company, leading to higher profits. There will always be some form of winners and losers when it comes to globalization but it comes down to trying to lessen the difference between then and create a way for everyone to enjoy some of the benefits.

  8. #3 I agree with the statement globalization creates both winners and losers. I say this because in globalization jobs that are lost in one country are jobs that are gained in another. The winners in globalization are companies who are saving money on labor by outsourcing jobs as well as the workers who are hired to perform these new jobs. Companies like Apple and Nike are finding workers quicker and cheaper in other countries than they would fine in America. Globalization can also create losers. Developing countries are now finding themselves in competition with already developed countries. Different countries have different resources which puts small countries like France at a disadvantage. As globalization becomes more prominent I think the gap between winners and losers will decrease.

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