Dear MEL Topic Readers,
They made America's clothing. Now they are getting punished for it.
In 2024, Cambodia purchased goods worth $12.7 billion from the US,
while generating $12.3 billion trade surplus, a trade deficit for the US. In
the same year, Sri Lanka exported goods worth $3.0 billion to the US but imported
only $368 million, creating 2.6 billion trade surplus with the US, or a trade deficit
for the US. Cambodia and Sri Lanka, along with Bangladesh, Myanmar, and Vietnam,
are the apparel industry’s alternative sources for China, where labor costs
have increased to an uncompetitive level. The Trump administration wants all
the countries around the world to reduce their trade surpluses with the US, or deficits
to the US, and has threatened any country that has a trade surplus with the US
with unbearably high tariffs, like over 20%. One question is whether these deficit-laden
developing countries can afford to buy much more US goods like Boeing jets or
Tesla EVs, which are unbearably expensive for them. Also, will US consumers be willing
to bear the price increase due to the higher tariffs on the once-affordable
garments? Manufacturers, exporters, and retailers all need to make money to pay
salaries to their employees and taxes to their governments. No one wins by high
tariffs, not to mention the workers in the garment factories in Cambodia and
Sri Lanka, who work for the minimum wage or even less.
Read the article and learn about how the US administration’s “reciprocal
tariffs” could affect the workers in developing countries.
No comments:
Post a Comment