U.S. Manufacturing Nears the Tipping Point

U.S. Manufacturing Nears the Tipping Point

          
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U.S. Manufacturing Nears the Tipping Point

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  • The Tipping-Point Industries

    The impact of the changing math of manufacturing will be felt the most in seven industry sectors that our analysis predicted would reach a tipping point in around five years, when the rising costs of producing in China will make it more economical to shift the manufacture of goods consumed in the U.S. to the U.S. Together, these industries account for nearly $2 trillion in annual U.S. consumption. In 2010, the U.S. imported nearly $200 billion worth of products in these categories from China—almost two-thirds of total Chinese exports to the U.S. (See Exhibit 4.) These industries are the following:

    • Computers and Electronics. The U.S. imports from China around 26 percent of the electronics it consumes, led by computers, wireless phones, and televisions. U.S. imports of these products from China in 2010 were worth $122 billion.

    • Appliances and Electrical Equipment. China supplies more than $4.5 billion in lighting products and $6 billion in small appliances such as fans, vacuum cleaners, and microwave ovens each year. China also exports big appliances like refrigerators, freezers, and dishwashers. U.S. imports of these products from China in 2010: $25 billion.

    • Machinery. Leading Chinese exports in this broad category include air conditioners, heaters, pumping equipment, office machinery, power tools, optical products, photocopiers, and farm equipment. U.S. imports from China in 2010: $16 billion.

    • Furniture. This industry, a traditional strength of southern U.S. states such as Virginia and North and South Carolina, witnessed a surge in imports from China from 2001 through 2006. U.S. imports from China in 2010: $13 billion.

    • Fabricated Metals. The array of metal products now made in China include plumbing fixtures, hardware, hand tools, cutlery, and pots and pans. U.S. imports from China in 2010: $10 billion.

    • Plastics and Rubber. Top Chinese exports to the U.S. include tires, floor coverings, and bottles. U.S. imports from China in 2010: $9 billion.

    • Transportation Goods. China has become a major source of car and truck components, motorbikes, bicycles, and aircraft parts. U.S. imports from China in 2010: $6 billion.

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