China’s Trade Practices

A friend forwarded me an email that outlined where some of the products you use on a daily basis come from. No surpriise, the message was on of enacting our own trade embargo against  China based on our buying habits,which  really should become choices instead.

In the email the writer suggested that if 200 million Americans chose to make a conscious decision and redirected just $20 of their monthly purchases away from the Chinese, it would create a $1b trade swap.

Aside from the math being incorrect there is a fallacy in the reasoning. $20 of retail sales does not equal $20 on the wholesale side. There is an impact on the whole stream from export to retail sale, that would effect more than just the Chinese.

However I do agree with the concept. According to the last census there are some 311 million people in the US. While not all are in a position to make purchasing decisions SOMEBODY is making purchasing decisions for them. So just for grins and giggles lets play the same game with some more realistic numbers.

Assume that for every retail dollar 25%  of it actually ends up in China. If a little more than half of the people in the US chose to buy other than Chinese products on $50 a month that would take some 2.4 trillion dollars out of the pockets of the Chinese. 166 million people at 25% of $600 annually  is a significant hit.

I already make a conscious effort to do this. How ’bout you?

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