Democrats and Republicans might not seem to agree on much these days. But when it comes to trade, they chant “China trade bad, tariffs good” in stereo, even as the data show the exact opposite.
For 15 years, I was responsible for hundreds of millions of dollars in Chinese imports entering the United States. I invented two enduring products—the “Backpack Beach Chair” and the “Magna Cart” portable hand truck—that can be found in Costco and other stores to this day.
Let’s use the Magna Cart to illustrate how America made billions while China made crumbs. The Chinese factory charged me $10 for a cart that cost them $9 to manufacture. U.S. retailers bought it from me for $15, then sold it to consumers for $30.
To recap: The factory made $1, I made $5, and retailers made $15, minus freight and U.S. tariffs.
The freight costs went to shipping lines, U.S. railroads, truckers, warehouses, and America’s highest-paid union workers—longshoremen at the Port of Los Angeles. As for those tariffs: Do the Chinese actually pay them, as former President Donald Trump claims? That would be illegal, as U.S. Customs charges tariffs only to the “importer of record,” which must be a U.S. entity. The monies collected go directly to Uncle Sam and retailers add them to their cost of goods, as with any other expense.
So each Magna Cart created $21 in profits, of which 95 percent went into American pockets. Selling 5 million carts meant a $100 million gain to the U.S. economy. Yet the official trade statistics framed that as a $75 million addition to the trade deficit.
After being fed a daily diet of such misinformation, is it any wonder Americans aren’t so warm on trade with China?
Wouldn’t American profits be even higher if these things were made in the U.S.A? That’s a big no, because many products simply wouldn’t exist. My original plan had been to manufacture in the United States. Then I saw the factory quotes, and I realized my babies would have to retail for more than $100. Thanks to China, tens of millions of Americans can now carry their chairs and gear to the beach with ease, and move heavy loads without tweaking their backs for under $40. (It used to be $30. Sigh.)
So why can’t we move all that manufacturing to other low-wage countries? Because only China has the massive workforce (800 million strong), the infrastructure, and the natural resources to supply 380 million Americans (plus 7.6 billion others globally) with every gizmo and gadget imaginable.
The nearly $500 billion that America imports annually from China enriches our economy by trillions. The math is so simple, you’d think even politicians could understand it.
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